Why Is Oatly's Share Price Down Today?
After one of 2021's most unusual yet interesting IPOs to date, Oatly could be in trouble after it was accused of fudging its numbers.
July 15, 2021

Having only floated on the Nasdaq back in late May, Oatly (NASDAQ: OTLY) has not exactly caused a storm in its young public life.

And things may get worse after it became the target of a scathing short-seller report. 

What's up with Oatly?

According to activist short seller, Spruce Point Capital Management, Oatly's been up to no good. The firm is accused of shady accounting practices as well as publishing misleading data relating to its sustainability efforts. 

In the short-sellers own words:

"Oatly will sorely disappoint investors and will never achieve profitability."

If you have a spare 3 hours or so to pore over the report, you can find it here. But the TL;DR of its accusations are:


  • 2018 U.S. revenue estimates provided by the company are double what other sources have given, raising accounting concerns. 
  • Costs are much more inflated than Oatly has stated. 
  • Oatly's impact on water consumption is worse than standard dairy milk production, raising environmental concerns. 

The big question now though is: should investors be worried? 

While it's never a nice feeling to see a company that you've invested in getting dragged through the mud, it doesn't always have to be a flashing 'SELL' warning. 

It's important to remember that Spruce Point Capital Management is not an official regulatory entity like the SEC. And while they may have valid concerns from their findings, it is also in their best interest, as short-sellers, to see Oatly's stock price fall. 

Spruce Point has requested that Oatly bring in an independent auditor to investigate these accusations, but no response has been given. Investors did not appear too convinced by the report, with Oatly stock falling just 2.8%. I guess we'll just have to wait and see with this one.

Meme stock investing too risky for you? Well, MyWallSt's got your back. Check out our shortlist of market-beating stocks by clicking here to start your free access today.


MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here



The Home of Successful Investing.

© 2023 MyWallSt Ltd. All rights reserved.


Services

Content

Social

Company

Support


This website is operated by MyWallSt Ltd (“MyWallSt”). MyWallSt is a publisher and a technology platform, not a registered broker-dealer or registered investment adviser, and does not provide investment advice. All information provided by MyWallSt Limited is of a general nature for information and education purposes, and you should not construe any such information as investment advice. MyWallSt Limited does not take your specific needs, investment objectives or financial situation into consideration, and any investments mentioned may not be suitable for you. You should always carry out your own independent verification of facts and data before making any investment decisions, as we cannot guarantee the accuracy or completeness of any information we publish and any opinions that we publish may be wrong and may change at any time without notice. If you are unsure of any investment decision you should seek a professional financial advisor. MyWallSt Limited is not a registered investment adviser and we do not provide regulated investment advice or recommendations. MyWallSt Limited is not regulated by the Central Bank of Ireland. MyWallSt Limited may provide hyperlinks to web sites operated by third parties. Your use of third party web sites and content, including without limitation, your use of any information, data, advertising, products, or other materials on or available through such web sites, is at your own risk and is subject to the third parties' terms of use.