The stock of Tecnoglass dropped 41% on Thursday after Hindenburg Research highlighted concerns about the company's founders and disclosed that it has a short position in the stock.
Hindenburg highlighted in a thorough study on the company that the stock has risen 390 % this year, owing to a pandemic-fueled real estate boom in Florida. Tecnoglass is a company that manufactures glass for both residential and commercial construction.
However, the short seller expressed concern over undeclared related party activities, which "that call the company's reported financial results into question." according to the short seller.
A Tecnoglass spokesperson could not be reached for comment right away.
Hindenburg said the research spanned months and included an examination of U.S. and Colombian court records, financial filings, corporation registrations, property records, export records, and media reports dating back decades.
Given management's experience and the inconsistencies it has seen, it claimed it has no faith in the company's financials. It requested that the auditor conduct a thorough examination of the company's customer transactions and outstanding amounts.