What happened
Shares of Tecnoglass (TGLS +2.24%) tumbled again on Friday, falling another 11% by 10:30 p.m. ET. That followed a more than 40% plunge in the glass stock on Thursday, caused by a damaging report from a noted short-seller. Today's decline comes even though the company provided investors with a business update that increased its full-year outlook.
So what
Tecnoglass provided investors with a business update following a recent report by a short-seller. The company reported that its adjusted earnings before taxes, interest, depreciation, and amortization (EBITDA) had increased 50% through November to $140 million on $456 million of total revenue.
Further, it boosted its full-year revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) ranges. It now sees revenue between $490 million and $495 million, up from its prior range of $485 million to $495 million. Meanwhile, it anticipates adjusted EBITDA between $147 million and $150 million, up from its previous guidance of $140 million to $145 million. The company also reported that it had generated about $100 million of operating cash flow through November.
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Tecnoglass directly addressed the short-seller report, saying it believes it "contains inaccurate statements, groundless claims, character attacks, and speculation with the intent of misleading investors and driving down the value of the company's shares for their personal gain." It also called the comments about company executives "personal, and arguably discriminatory, attacks" meant to "distract from the company's achievements and progress."
The glassmaker also pointed out that it recently increased its cash dividend by 136%, a sign of confidence in its ability to grow. It noted that it received favorable terms and increased financial capacity on its credit facility. Finally, Tecnoglass encouraged investors to read its financial results, audited by the New York-based national office of PricewaterhouseCoopers.
Now what
Tecnoglass' business update suggests its underlying financial results are coming in better than expected. However, that didn't help stem the selling in its stock since one of the main points of the short-seller report is a lack of confidence in the company's financial reporting. Investors will likely need to see more from the company and its auditors before they have complete confidence in its reported numbers.
