After a month-long trading suspension in its shares, baby products manufacturer Prince Frog International (01259.HK) has issued a statement refuting the allegations made by US short-seller Glaucus Research. The assurances, however, don’t seem to have worked as the counter plunged sharply upon resuming trade Thursday, tumbling more than 19 percent at one point to the session low of HK$3.64.
With the latest slide, the stock has lost nearly 42 percent of its value since Glaucus issued its report on Oct. 16
“The company believes that the claims made in the report are without merit and not supported by evidence,” Prince Frog said in its statement.
Glaucus’ allegations were based on erroneous and inappropriate reports, the statement said, hinting that the US firm intended to mislead investors and shareholders to make profit by short-selling the stock.
Prince Frog said a Nielsen report that Glaucus referred to in painting a negative picture of the sales performance and market share of the Chinese childcare product maker was not accurate enough. For example, Prince Frog’s baby moisturizing lotion is not comparable with Nielsen reports on products that make skin soft or look younger, have anti-aging, firming and whitening effects, it said.
The group then said that Glaucus’ use of the Nielsen report as a backup for its accusations were not valid, as children aged 4 to 12 years do not need such skin products.
Last month, Glaucus claimed that Price Frog’s stock price was not worth more than HK$1.0. It alleged that the Chinese company had exaggerated its sales data and that the public awareness of the brand is also not as high as what the group has projected.
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