Grifols shares rebound after KPMG greenlights accounts in wake of short-seller's report

By Louis Goss

Shares in Grifols rebounded from historic lows on Friday after its auditor KPMG signed off on its accounts, in a vote of confidence in the Spanish medicine maker, following a collapse in its stock price caused by a series of damaging short-seller reports.

Grifols' (ES:GRF) shares increased 19% on Friday, having lost 44% of their value in the year-to-date, following short-seller Gotham City Research's publication of a report on January 9 that raised questions about the Spanish firm's debt to earnings ratio.

In a filing, KPMG said it believes Grifols' accounts for the year ending on 31 December 2023 give a "true and fair view, in all material respects, of the consolidated equity and consolidated financial position of the Group."

The auditor also said its opinion had remained unchanged in light of the information published by Gotham City Research. "Our opinion is not modified in respect of this matter," KPMG said.

Grifols had previously published an unaudited set of full-year 2023 results last Thursday, stating it would receive an auditor's opinion the following week, in a delay that raised investors' concerns about the Barcelona company.

Spain's National Securities Market Commission regulator is currently investigating Gotham's claims and has requested further information from Grifols in order to make a final decision.

KPMG's green light is expected to go some way in restoring investors' confidence in the 84-year-old healthcare company, which makes blood plasma products.

On Wednesday, Gotham City Research raised further questions about Grifols' "transparency, integrity, and ethical conduct," as it alleged the Spanish company had ""selectively disclosed new information" to analysts, but not the wider public in a bid to refute Gotham's reports.

Grifols on January 26 said it had filed a lawsuit against Gotham City Research, its founder Daniel Yu, and other linked to the company, in seeking compensation for the "financial and reputational damages" caused by its reports.

Grifols previously said: "We categorically deny and reject any allegations of wrongful accounting or reporting practices."

See also: Grifols' shares plunge further on short-seller's new report

-Louis Goss

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03-08-24 0705ET

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