- The plant-based Swedish food company saw its stock decline to an all-time of US$19.62.
- Short seller Spruce Point questioned Oatly’s accounting and sustainability practices.
- Oatly’s stock traded in the range of US$19.62 to US$29.00 since it NASDAQ IPO in May.
Oatly Group AB (NASDAQ: OTLY) stock hit its all-time low on Wednesday’s trading after New York-based investment management firm Spruce Point Capital Management LLC made several allegations against the oat milk company including revenue and margin overstatement.
Spruce Point said Oatly overstated its gross margins by not including outbound shipping costs. The short seller said there are inconsistencies in Oatly’s US segment revenue and consolidated reported revenue, and the company has allegedly inflated its capital expenditure.
In addition, Spruce Point said Oatly misled investors regarding the company’s sustainability practices related to its impact on water consumption and production process.
The report also questioned Oatly’s transparency about its CFO Christian Hanke. Spruce Point said the company gave an incomplete biography on Hanke by revealing his role as manager of financial reporting at Stratus Technologies, which had restated its financials during his period.
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The Sweden-based Oatly started trading its shares on NASDAQ on May 20, 2021. The company was valued at US$10 billion on its first trading day. It raised US$1.4 billion in the public offering by selling 84.4 million American depositary shares at US$17 apiece.
Oatly currently has a market capitalization of US12.05 billion. The shares traded in the range of US$19.62 to US$29.00 since the listing.
As of 2:09 pm ET on July 14, Oatly’s shares were trading at US$20.37, down 3.60 percent.
In its registration statement prior to the IPO, Oatly said its revenue more than doubled to US$421.4 million in 2020 from the previous year. Net loss widened to US$60.4 million from US$35.6 million in 2019.
The gross margin was 30.7 percent in 2020, compared to 32.6 percent in 2019. The company said it projects net capital expenditures for 2021 to be in the range of US$350 million to US$400 million, for 2022 to be in the range of $300 million to $400 million.
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