Short seller accuses luggage giant Samsonite of profit manipulation
Samsonite Intl Sa
€3.21
19:59 22/03/17
Shares in luggage peddler Samsonite plummeted on Thursday before being placed in a trading halt, amid allegations the firm had been massaging its profits.
The American-founded, Luxembourg-registered, Hong Kong-based baggage manufacturer confirmed that trading in its shares - listed on the Hong Kong Stock Exchange - were suspended on Thursday morning.
It said that was pending the release of an announcement “in respect of further clarification on a report containing allegations against the company”.
No such announcement has yet been forthcoming as at 1400 BST on Thursday afternoon.
The allegations came from Blue Orca Capital, which claimed the luggage group had inflated its margins and manipulated its earnings figures.
Blue Orca Capital has a short position in Samsonite.
“Samsonite is a mid-level brand masquerading as a premium luxury player," Blue Orca stated.
“Samsonite is more sensibly compared to a peer group of mid-tier brands.”
The short seller fell 12% in Hong Kong before the suspension.
Blue Orca claimed Samsonite’s shares were worth HKD 17.59 each, a 43% discount to its last traded price of HKD 30.70.
The average target price among analysts was most recently put at HKD 38.