What Happened: Spruce Point Capital Management, a short-selling asset management business, has accused Oatly Group (NASDAQ: OTLY) of greenwashing investors by misrepresenting revenue and margins.
“Oatly rejects all these bogus allegations by the short seller and stands behind all actions and financial reporting,” an Oatly spokeswoman said of the Spruce Point Report, adding that Spruce Point was “making false and misleading statements against the firm.”
Why Does This Matter? Spruce Point’s accusations of greenwashing, which is defined as the misrepresentation of information about environmental sustainability, are extremely harmful to a firm whose major product is oat milk, a more environmentally friendly alternative to cow milk.
In a recent investor presentation, Spruce Point went even farther, accusing the company of misrepresenting revenue reports.
Despite a recent report from Nielsen and Umgas Magazine, a Swedish news organization, claiming only $6 million in revenue in 2018, the presentation claimed $12 million in revenue in the United States in 2018.
Oatly, for example, was founded in Sweden in the 1990s but didn’t make a name for itself in the United States until 2016.
OTLY Price Movement: At press time, Oatly’s stock was trading at $20.49, down 3.03 percent for the day.
The stock had hit an all-time low of $19.62 earlier in the day.
Oatly went public in late May with a $13 billion valuation, with all-time high stock prices of $29 per share.
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