Investing.com -- Shares in Eurofins Scientific (EPA:EUFI) rose on Tuesday, paring back some losses posted in the prior session, after the French laboratory group rejected short seller Muddy Waters' (NYSE:WAT) accusations that it had misrepresented its financial statements.
On Monday, Muddy Waters said it was short Eurofins, citing "confusion and contradictions" in the company's operations that led it to believe Eurofins was "optimized for malfeasance, rather than for conventional business."
In particular, Muddy Waters claimed Eurofins' financial disclosures contained "material overstatements" of its profits, cash balances and other asset values.
However, Eurofins, which provides testing and support services to firms across a number of industries, dismissed the allegations, calling them "blatantly wrong and/or misleading." They added that Muddy Waters has "never participated" in its investor events and has not engaged with Eurofins to discuss the "correctness or relevance of their assumptions, hypotheses and inferences."
"Upon a first review of their claims, it is Eurofins’ view that the entirety of the allegations and insinuations contained therein is either inaccurate, irrelevant, biased and/or misleading," Eurofins said in a statement.
It noted that it would release a more detailed response in "due course" and will work with auditors to prepare "further analyses as required."
In the wake of Muddy Waters' report, shares in Eurofins shed as much as 25% of their value on Monday.