MUDDY WATERS GOES SHORT ON $ELF (+3,75%) BEAUTY, QUESTIONS REVENUE

Muddy Waters has announced a short position in e.l.f. Beauty, alleging the company overstated revenue by $135M-$190M over the last three quarters. The firm claims inventory growth signals insufficient sales rather than a sourcing change, as e.l.f. management stated.

The report alleges possible deception of auditors, with Muddy Waters questioning reported revenue, profits, and inventory levels. It argues the company’s growth narrative faltered in Q2 FY24, leading to inflated financial reporting.

This raises significant red flags about e.l.f.’s accounting practices.