The cosmetics and skin care company e.l.f. Beauty, Inc., is denying allegations made by short-seller Carson Block, founder of Muddy Waters Research, that the company has been inflating its revenue.
"Muddy Waters’ latest report is an attempt by a noted short seller to negatively impact e.l.f. Beauty’s share price for its own benefit and at the expense of all other e.l.f. Beauty shareholders, and Muddy Waters’ allegations are without merit," the company said in a statement released on Thursday and emailed to Fortune.
Muddy Waters has made "numerous inaccurate statements" about the company by relying upon "incomplete data and flawed assumptions, omitting critical context, and presenting speculation as fact," e.l.f. Beauty stated. The company said it has rigorous controls and procedures around revenue recognition and is "fully confident" in its financial statements.
