According to the report, “Aphria generates a minimum amount of sales relative to its market cap, we believe that the uncovering of this alleged scheme, coupled with a massive asset write-off, would have catastrophic consequences for its share price.” Hindenburg Research and Quintessential Capital Management presented this report in Kase Learning Short Selling Conference on Monday.
Monday afternoon Aphria responded to the allegations by saying that the short-seller report is a malicious and self-serving attempt to profit by manipulating Aphria’s stock price at the expense of Aphria’s shareholders. Hindenburg Research replied in a tweet that Aphria had responded to none of its allegations and it stands by the report with 100% conviction.
Aphria issued a ‘response’ that responded to NONE of our allegations. We stand by our report with 100% conviction. $APHA
cc @QCMFunds https://t.co/Pms2O6rnvk
— Hindenburg Research (@HindenburgRes) December 3, 2018
Shares of Aphria had lost 59% so far in the year-to-date period and 32% in the past one year. The stock dropped more than 10% during the pre-market hours on Tuesday and it plunged to a new 52-week low after the market opened.