Essential Utilities shares drop 3% after critical short-selling report

essential utility

Shares fell as much as 3% on Wednesday after the announcement by US-based short seller Spruce Point Capital Management. report to utility companies.

New York-based investment managers, led by Ben Axler, expressed concern about the “effectiveness” of the business model and the “accuracy” of financial reporting for U.S. water, wastewater and natural gas providers.

The stock initially fell 3% to $40.64 before rising 2% to $42.40 per share.

The 106-page report calls for a ‘strong sell’, with 35%-50% downside risk.

A spokesperson for Essential Utilities said in a statement: Spruce Point Capital is a hedge fund known for launching negative campaigns against companies after taking short positions in their own stocks. ”

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