Shares of medical system maker Penumbra tank after quick vendor releases vital report
Shares of Penumbra slid about 17% on Tuesday after short-seller Quintessential Capital Management released a critical report on the California-based medical devices maker. The stock was halted shortly after 2 p.m. ET for news pending.
Quintessential Capital has a short position in Penumbra, meaning it is betting that the stock will go down. The firm first began to target Penumbra last month, releasing a more than 100-slide report that, among other things, claimed its JET 7 catheter has been associated with at least 18 deaths and 39 injuries. Quintessential Capital also claimed Penumbra may have mislead doctors and investors alike.
In its latest report, Quintessential Capital claims a “substantial portion” of the company’s scientific research is authored by a fake person named Dr. Antik Bose. “This person is a fake. We have no doubt, whatsoever,” Gabriel Grego, managing partner of Quintessential Capital, said Tuesday on CNBC’s “Halftime Report.”
Quintessential Capital directed its allegations of misconduct to the U.S. Food and Drug Administration, requesting the regulatory agency launch an investigation in a letter dated Tuesday. The firm also submitted a whistleblower tip to the SEC, according to records Grego shared with CNBC.
Penumbra has a market capitalization of around $7 billion as of Tuesday afternoon. At the time Quintessential Capital released its November report targeting the company, its market cap was around $9.4 billion.
Penumbra pushed back against Quintessential Capital’s allegations in a statement to “Halftime Report,” saying that since its founding in 2004 its “innovative medical devices have helped saved the lives of hundreds of thousands of patients facing life-threatening medical conditions.”
“This attack by sleazy short sellers QCM reads like an internet conspiracy written by teenagers. It is impossible to dispute the facts, because there are no facts,” the company said in an email. “Penumbra feels very comfortable stating that none of the allegations in this short sellers’ diatribe are accurate. The claims are nothing but a baseless campaign by shameless short sellers who are willing to risk lives in order to make a quick profit.”
–CNBC’s Lora Kolodny contributed to this report.