Elf Beauty counters allegations of short seller Muddy Waters

The beauty brand Elf Beauty denies accusations by the well-known short seller Muddy Waters, alleging that the company has overstated its revenues and inventories. Muddy Waters, led by Carson Block, has taken a short position in Elf and claims the company artificially inflated its revenues by up to $190 million over the past three years and bloated its inventories to cover up insufficient sales figures. On Wednesday, the short seller's report caused a stir on the stock market with a price drop of up to 16 percent before the shares recovered and closed at $119 with a 2.2 percent loss. Elf had seen an impressive rise since 2023 and reached a record high in March. Elf Beauty states that the allegations are unfounded and merely an attempt by Muddy Waters to manipulate the stock price to their own advantage. Despite the weakening beauty market affecting industry giants like Estee Lauder and L'Oreal, Elf is raising its annual forecasts for revenue and profit, positioning itself as a successful company. Furthermore, for competitive reasons, Elf Beauty has filed an application with the US Customs and Border Protection to treat import data more confidentially in the future. This information will no longer be fully accessible to the public from February 6, 2024.