amid stunned analyst chatter in response to the report accusing the Catalan company Grifols of manipulating its accounts. astonishment piles up as the bombshell from the American financial firm Gotham City Investigation hits the market. the claim is that Grifols falsified figures to such a degree that stock prices did not accurately reflect book value. Grifols shares had surged about 48 percent in 2023, with expectations of further gains, but after a rally they slid around 42 percent on Tuesday. while the veracity of the accusations remains under scrutiny, a deep crisis of confidence grips investors and the bearish side of the market finds fertile ground in derivative trades that bet on a rapid decline in Grifols’ stock. the momentum is clearly unfavorable to the optimistic bets still clinging to the optimistic assessments.
What does Gotham City say in the report accusing Grifols of manipulating its accounts?
Analysts from brokerage houses and investment banks stayed cautious on Wednesday in the face of confusion. XTB analyst Javier Cabrera explained that the focus must stay on future events and the reaction from Grifols. The alleged irregularities in the company’s results appear substantial and, if they prove true, could push the share price down toward historically low levels. He pointed to a pattern of management changes and instability in recent years that seem to reinforce the accusations. Debt reduction has long been a priority, evidenced by staff cuts and the partial sale of a Chinese subsidiary. If the Gotham report’s claims hold up, the actual debt could be much higher than reported, which could pose medium-term difficulties for Grifols. Cabrera added that it would not be surprising to see further reports clarifying the situation as the legal landscape develops.
XTB analysts further note that Grifols has continued to acquire companies while debt rose and a wave of asset disposals followed. that behavior, they say, signals a potential effort to mask underlying problems. a notable detail is that EBITDA margins, the company’s pre tax profitability, have declined over the years despite ongoing acquisitions, a trend that does not align with rational financial logic.
Alantra Stock voices a more cautious stance, suggesting that the current situation does not place Grifols in immediate liquidity or solvency danger, thanks largely to the sale of shares in a subsidiary announced recently. still, external audit scrutiny will be essential to reassure the market and restore confidence.
Short positions, Gotham advantages
with Grifols facing a sharp pullback, Gotham City itself emerges as one of the biggest beneficiaries. Investment funds including Gotham City Research, Portsea Asset Management and Ako Capital have built a combined short stake in Grifols’ capital. The regulator CNMV reported that General Industrial Partners, a fund created through a collaboration of Gotham City Research and Portsea, disclosed a short position of a little under one percent. Ako Capital has indicated a reduction in its short exposure to just over four tenths of a percent. At the end of trading on a recent day, the combined value of these short positions would be in the region of tens of millions of euros, illustrating how the market places bets on a decline.
Short selling typically involves borrowing money and selling the asset with the plan to buy it back later at a lower price, returning the asset and pocketing the difference. When options and derivatives are involved, the potential gains can multiply without a direct purchase of the stock. The net exposure tied to Gotham’s reported positions was substantial, and the actual gains would depend on Grifols’ price movement in subsequent sessions.
If any portion of the Gotham report is validated, the National Securities Market Commission, CNMV, would be among the first to be affected. The CNMV president stated that the regulator would use its powers to clarify the situation and that suspending trading is not automatically the best path when investors have access to information that allows them to make informed decisions. The dialogue around information completeness and market transparency remains central to the unfolding events.