Gotham Targets Grifols, Shares Plunge 35%

Gotham Targets Grifols, Shares Plunge 35%

A single tweet was enough to shake up the Spanish stock market. Gotham City Research—the same firm that exposed Gowex—announced it would publish a report on "a highly leveraged Spanish company valued at over €10 billion." Speculation ran wild before the document even existed, with guesses ranging from ACS and Acciona to Cellnex and even a bank. Almost no one guessed correctly.

The target was Grifols, the blood plasma giant controlled by its founding family, which had been grappling with mounting debt. The report, titled "Scranton and the Undisclosed Debts," drew parallels to NMC Health, the British company that collapsed in 2019, wiping out billions.

The reaction was swift. The stock peine down 17%, fell to -26% by the time the report was found, and ultimately plummeted to -35%. The most common comment: "What if Gotham is right?"

What the Report Says and Grifols' Response

The core of the attack focused on the group's corporate operations: its relationship with Scranton, related-party transactions, and a preferential purchase option on certain subsidiaries. The bearish argument, in essence: holding a purchase option is not the same as control, and if this distinction is used to remove debt from the balance sheet, the numbers don't add up.

Grifols denied the conclusions and simultaneously filed a lawsuit against the firm to prevent the publication of further reports. The company's response included a detail sarcastically highlighted: it first claimed the information was false, then recalled it had disclosed it six years prior. The two statements are contradictory.

The SEC's Shadow in the Grifols Case

One of the most significant factors was the looming presence of the US regulator. Grifols trades as an ADR in the United States and, as emerged from the situation, had already changed its audit committee at the SEC's request. For some analysts, this is the key: if a short-seller's report were pure fabrication, there wouldn't be such internal shifts.

Some recall that Gotham operates with its own interests in these types of maneuvers. However, the audit committee change at the SEC's behest doesn't quite fit with that objection.

Why Gowex Still Looms Over Every Comparison

Gowex is the ghost that won't disappear. That Wi-Fi business operating from kiosks was listed on the MAB—where controls were rather lax—and disintegrated after Gotham published its report. Many investors scoffed at the firm back then, simply based on its name, and bought what they thought were bargains. We all know how it ended.

The difference this time is scale and arena. Grifols isn't a sham operation: it has a real industrial business, international presence, and thousands of employees. But it's listed on the IBEX, where the CNMV (Spain's National Securities Market Commission) and audits are supposed to provide serious oversight. That's the real blow: not that a small company deceives, but that a blue-chip company falls under suspicion.

The Blow to Confidence in the Spanish Stock Market

The most repeated—and most uncomfortable—conclusion is the same old refrain: don't invest in Spain. A 35% drop in a single session is not easily forgotten, especially when lawsuits remain unresolved and the stock struggles to regain lost ground.

Some argue that this is all a storm that the core business will eventually weather. Others look at the balance sheet and see no clear path forward. With the case in court and the audit committee changed, the question is no longer whether Grifols is worth less. It's how much less, and who will decide: the market or the judges.

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