Grifols S.A. (GRFS – ADR ADR Class B) Shares Decline Again After Gotham City Research Issues Another Critical Report – Hagens Berman

SAN FRANCISCO, March 20, 2024 (GLOBE NEWSWIRE) -- Hagens Berman urges investors in Grifols, S.A. (NASDAQ: GRFS – ADR ADR Class B) who suffered substantial losses to submit your losses now.

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Grifols S.A. (GRFS – ADR ADR Class B) Investigation:

Shares in embattled Spanish pharmaceutical and chemical manufacturer Grifols S.A. declined sharply again on Mar. 6, 2024, after activist short seller Gotham City Research issued another report questioning Grifols’ “commitment to transparency, integrity, and ethical conduct.”

Gotham initially took aim at Grifols on Jan. 9, 2024, when it released a report entitled “Grifols S.A.: Scranton and the Undisclosed Debts,” attacking the company’s accounting and corporate governance and saying that Grifols’ paltry cash generation has made its existing debt unsustainable.

Although Grifols vehemently denied Gotham’s accusations – going as far as to sue the hedge fund’s founder Daniel Yu in U.S. courts – the company has endured a slew of negative events in the aftermath of the report, erasing over 50% of its market capitalization. This includes a disappointing Q4 and FY 2023 earnings release, several analyst downgrades, and the departure of Grifols’ family members from their executive posts.

Gotham’s latest report takes issue with Grifols’ disclosure of a 319 million euro ($346.6 million) loan in its 2022 Annual Report. Grifols booked the loan under “other financial assets with other related parties,” however, Gotham claims it was lending activity between Grifols and Scranton Enterprises, the Grifols’ family entity, as part of a cash pooling financing arrangement. Gotham contends Grifols’ disclosure of the loan was “neither detailed, nor correctly identifies the nature of the transactions.”

Gotham is not the only investment firm to recently question the propriety of Grifols’ disclosures. On Mar. 5, 2024, securities analysts at Alantra Equities downgraded Grifols shares, reporting saying it had “lost confidence” in the company. Alantra analyst Alvaro Lenze reportedly wrote that he was unable to make sense of the firm’s free cash flow guidance, adding that its explanations left him with “more questions than he had initially[,]” and cited a “lack of communication and transparency[.]”

“We are investigating whether Grifols may have manipulated its debt and earnings through its treatment and disclosure of transactions with related entities,” said Reed Kathrein, the Hagens Berman partner leading the firm’s investigation.

If you invested in Grifols American Depositary Receipts (GRFS – ADR ADR Class B) and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now »

If you’d like more information and answers to frequently asked questions about the Grifols investigation, read more »

Whistleblowers: Persons with non-public information regarding Grifols should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].

About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation law firm focusing on corporate accountability through class-action law. The firm is home to a robust securities litigation practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and fraud. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. 

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Contact:
Reed Kathrein, 844-916-0895