Oatly Accused of Shady Accounting Practices, Greenwashing

Oatly (NASDAQ: OTLY), the Swedish company that creates oat-based milk alternatives and recently made its public debut at a market value of nearly $13 billion, is being accused of shady accounting practices and greenwashing.

Activist short seller Spruce Point Capital Management has accused Oatly of overstating its revenue and margins, as well as misleading investors about its sustainability initiatives. The hedge fund, which has taken a short position against the oat milk maker, points out in its report that Oatly’s most recent investor presentation showed an estimated revenue of $12 million in 2018, when in fact Nielsen and Umgas Magazine, two Swedish publications, both reported that the company’s net US sales only reached $6 million during that year.

Moreover, Spruce Point also accuses Oatly of overstating its gross margin, given that the company failed to account for outbound shipping and handling costs in its accounting calculations. The company also reportedly failed to acknowledge that its gross profit presentation does not commensurate to that of similar companies. The hedge fund found that Oatly’s gross margin is actually 6.4% lower once shipping and logistics are accounted for.

Oatly, which has referred to itself as a more environmentally friendly alternative to cow’s milk and other non-dairy alternatives, has also allegedly been misleading investors about its green credentials. In its short seller report, Spruce Point accuses the company of cherry-picking data by not disclosing that its water usage is actually higher than that of cow’s milk production.

In addition, the hedge fund also points out that Oatly’s New Jersey facility has not been in good standing with the Environmental Protection Agency, although EPA’s website fails to disclose the details surrounding the violation(s). The short seller also retrieved documents via the Freedom of Information Act in New Jersey, which showed a number of problems with the Oatly facility’s wastewater in 2019. The oat milk company has yet to open a wastewater treatment facility, despite the significantly high levels of byproduct that result from oat milk production.

Since Oatly’s IPO in May, the stock has risen by more than 4.5%, giving it a market value of around $12.5 billion. However, following the news, the company’s stock hit a new low of $19.84 per share, before rebounding to $20.70 at the time of writing.


Information for this briefing was found via Spruce Point. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

2026 Could Be Gold’s Biggest Year Yet!? | Ryan King – Equinox Gold

Gold Is Screaming Higher While Currencies Burn | Simon Ridgway – Rackla Metals

We Have the Highest-Grade Antimony Deposit in North America!? | Jim Atkinson -Antimony Resources

Recommended

Canadian Copper Secures $8 Million Lead Order From Ocean Partners As Part Of Larger Funding Round

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Related News

Oatly Sees Co-Founder Depart Company After Less Than A Year Being Public

After less than a year of being public, it appears that one of the co-founders...

Thursday, December 30, 2021, 07:41:39 AM

Airbnb Slumps After Short Seller Report Discloses Hosts Are Competing With The Platform

Airbnb (Nasdaq: ABNB) stock plummeted as much as 6% on Thursday after a short study...

Saturday, April 8, 2023, 09:00:00 AM

Grizzly Reports Accuses Trulieve of Fraud, Insider Dealing

This morning, short selling research firm Grizzly Reports released a report on that of cannabis...

Tuesday, December 17, 2019, 09:58:42 AM

Muddy Waters Research vs. Chamath Palihapitiya: The Role Of Short Seller Reports

In a nutshell, short seller reports expose certain information about the corporation, frequently alleging dishonesty...

Monday, February 6, 2023, 05:12:00 PM

Grizzly Research Takes Aim At Chinese Educator GSX Techedu, Alleges Fraud, Fake Enrollment Figures

Grizzly Research this morning put out their latest short report, this time targeting that of...

Tuesday, February 25, 2020, 10:09:23 AM