Penumbra’s shares were down about 17% Tuesday after short seller Quintessential Capital Management released a critical report on the California-based medical device maker. The stock halted shortly after 2 p.m. ET due to outstanding news.
Quintessential Capital is short in Penumbra, which means they are betting that the stock will fall. The company first began targeting penumbra last month, releasing a report of more than 100 slides claiming, among other things, its JET 7 catheter had been linked to at least 18 deaths and 39 injuries. Quintessential Capital also alleged penumbra misled doctors and investors alike.
In its most recent report, Quintessential Capital claims that an “essential part” of the company’s scientific research was carried out by a fake person named Dr. Antique Bose. “This person is a fake. We have no doubts,” said Gabriel Grego, managing partner of Quintessential Capital, on Tuesday in CNBC’s “mid-term report”.
Quintessential Capital directed its allegations of misconduct to the US Food and Drug Administration and wrote to the regulator on Tuesday to open an investigation. According to records that Grego shared with CNBC, the company has also given the SEC a whistleblower tip.
Penumbra has a market cap of around $ 7 billion as of Tuesday afternoon. At the time of Quintessential Capital’s November report for the company, its market cap was approximately $ 9.4 billion.
In a statement accompanying the Mid-Term Report, Penumbra denied Quintessential Capital’s claims, saying that its “innovative medical devices have helped save the lives of hundreds of thousands of patients suffering from life-threatening diseases since its inception in 2004”.
“This attack by bad QCM short sellers reads like an internet conspiracy written by teenagers. It is impossible to deny the facts because there are no facts,” the company said in an email. “Penumbra is very comfortable finding that none of the claims made in the diatribe of these short sellers are true. The claims are nothing more than a baseless campaign of shameless short sellers willing to risk lives for a quick profit. “
– CNBC’s Lora Kolodny contributed to this report.