Oatly short seller says stock is worth less than $ 10 a share

Short seller Ben Axler said Thursday that Oatly’s shares were worth less than $ 10 a share after his company released a report alleging the company had engaged in shady accounting practices and misled investors into error on its sustainability claims.

The stock fell 3% in morning trading on Thursday, a day after Axler’s firm, Spruce Point Capital Management, released the report. Still, the shares are trading around $ 20, giving the company a market value of $ 11.9 billion.

“Oatly is one of those puffy bubble stocks,” Axler said Thursday on CNBC’s “Squawk Box”.

At the end of May, Oatly valued its initial public offering in the United States at $ 17 per share. Since its debut on the public market, the stock has not fallen below its IPO price.

Oatly denied the allegations, calling them “false and misleading”.

“This short seller stands to benefit financially from a drop in Oatly’s stock price caused by these false reports,” the company said Wednesday in a statement to CNBC. “Oatly rejects all such misrepresentation by the short seller and stands behind all financial activity and reporting.”

Spruce Point Report Includes Allegations Oatly Overestimated Its 2018 U.S. Revenue By $ 6 Million, Failed To Disclose Its Gross Margin Calculation Is Not Comparable to Other Food Companies and inflated its capital spending.