Laboratory testing company Eurofins on Tuesday refuted concerns raised a day earlier by short-selling firm Muddy Waters, which questioned its financial reports and caused its stock prices to drop. Eurofins expressed confidence in its finances and operations.
On Monday, Muddy Waters disclosed a short position on Eurofins' stock and released a report suggesting the company's financial statements could be significantly overstating profits, cash balances, and the value of other assets.
In a statement, Eurofins said: "We believe these accusations and implications are either inaccurate, irrelevant, biased, and/or misleading."
Eurofins stated: "We have full confidence in the integrity of our financial statements, operational performance, internal controls, and risk management."
Founded in 1987 by current CEO Gilles Martin, Eurofins provides laboratory testing services to industries such as pharmaceuticals, food, and cosmetics, and experienced some growth during the pandemic.
In response to an allegation in the short report, Eurofins asserted that all real estate transactions with related parties were conducted "at market prices" and "all buildings were paid for by their owners."
The company also added that its cash balances at both local and consolidated levels were audited and that all necessary communications were made between the accounting team and the auditors.
Eurofins indicated it would release a detailed response "in due course" and collaborate with auditors to prepare further analysis reports.
After a 25% drop on Monday, Eurofins' stock rose 4.7% to 46.3 euros by 0730 GMT on Tuesday.
