Why Technoglass Stock is plummeting again today



What happened

Actions of Technoverre (NASDAQ: TGLS) tumbled again on Friday, falling another 11% as of 10:30 p.m. ET. This followed a more than 40% dive in the glass stock Thursday, caused by a damaging report from a famous short seller. Today’s drop comes even though the company provided investors with a trading update that raised its outlook for the full year.

So what

Technoglass has provided investors with a trade update following a recent report from a short seller. The company said its adjusted earnings before taxes, interest, depreciation, and amortization (EBITDA) had grown 50% through November to $ 140 million out of $ 456 million in total revenue.

In addition, it increased its turnover in full year and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). It now has revenues of between $ 490 million and $ 495 million, down from an earlier range of $ 485 million to $ 495 million. Meanwhile, he forecasts Adjusted EBITDA between $ 147 million and $ 150 million, up from his previous forecast of $ 140 million to $ 145 million. The company also said it generated around $ 100 million in operating cash flow through November.

Image source: Getty Images.

Technoglass directly addressed the short seller’s report, saying he believed it “contains misrepresentation, baseless allegations, character attacks and speculation with the aim of deceiving investors and driving down value. shares of the company for their personal gain “. He also called the comments on company executives “personal and arguably discriminatory attacks” aimed at “distracting from the achievements and progress of the company.”

The glassmaker also pointed out that he recently increased his cash dividend by 136%, a sign of confidence in his ability to grow. She noted that she had benefited from favorable terms and increased financial capacity on her credit facility. Finally, Technoglass encouraged investors to read its financial results, audited by the New York-based national office of PricewaterhouseCoopers.

Now what

The Technoglass activity update suggests that its underlying financial results are better than expected. However, this did not help stem the sell off of its shares, as one of the main points of the Short Sellers Report is the lack of confidence in the company’s financial reports. Investors are likely to need to know more about the company and its auditors before they can have complete confidence in its published figures.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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