LKQ Says Short-Seller’s Report Inaccurate After Shares DropNick Taborek
LKQ Corp., which fell almost 9 percent yesterday after short seller Prescience Point Research Group said it exaggerated revenue growth, called the report inaccurate.
The shares dropped 0.6 percent to $29.29 as of 4 p.m. in New York. The stock tumbled 8.8 percent yesterday as Prescience Point said profits at LKQ have been amplified by acquisitions.
“We have reviewed the report and disagree with many of its statements, assumptions and conclusions,” LKQ said in a statement today. “It contains numerous inaccuracies.”
LKQ, an auto-parts repair service, said it plans to report fourth-quarter results in-line with the forecast given in October. The Chicago-based company said cash flow from operations will be above its earlier estimate.
“I am proud of the honesty and integrity with which we have operated our business and take exception to any claims to the contrary,” Robert Wagman, chief executive officer of LKQ, said in the statement.
Research firms, such as Prescience Point, study a company’s financial statements and try to profit by borrowing shares and selling them with the aim of buying the stock back at a lower price and pocketing the difference. Prescience Point said in the report that it will make money from a retreat in LKQ shares.