In a statement, energy drink manufacturer Monster Beverage Corporation said that a study by short-selling firm Spruce Point Capital Management included “false” and “misleading” descriptions of the company’s operations.
As a result of consumers seeking healthier energy and hydration drinks due to the negative stigma associated with energy drinks, Monster’s “slow growth in US and Canada further raises concerns about Monster’s mindshare among its consumers,” according to the report, which was published on Tuesday, April 8.
The report, in addition to claims regarding the company’s growth, asserts: “We have identified several concerns with the financial reporting and accounting choices,” after Monster’s auditor transition in 2023, and that “Monster has historically failed to implement best corporate practices by not separating the duties of the chief financial officer, chief accounting officer and chief operating officer roles.”
According to Spruce Point, it: “Believes that the company faces pressures from increasing competition, changing regulatory environments and unsustainable international growth. We believe that investors may be mistakenly perceiving this food and beverage stock as a ‘safe stock’ during this period of tariff-driven market turmoil.”
The California-based company Monster produces and sells energy drinks, still and sparkling waters, and craft beers. In response to the report, the company stated that the information it contained was sourced from unreliable sources.
Monster’s Chairman and Vice Chairman, Rodney Sacks and Hilton Schlosberg, respectively, and co-chief executive officers issued a joint statement that said: “We have always prided ourselves on having and continue to have a strong reputation for ethical operations and transparent reporting and these principles remain critically important to all of us at Monster.
“The document released by a self-interested activist short seller is filled with and based on inaccuracies and aspersions that appear to be designed to distort the company’s record and share price for its own gain. The company’s management remains focused on the business with the ongoing objective of creating long-term value for our stakeholders and investors.
“The company’s consolidated financial statements and other financial information filed with the Securities Exchange Commission have historically been and continue to be fairly stated in all material respects, presented in accordance with generally accepted accounting principles and are governed by SEC rules and regulations,” it added.
The board of directors of Monster has once again expressed faith in the company’s leadership and strategic orientation.
Continuing, Mark Vidergauz, the Lead Independent Director, stated: “On behalf of the entire board, we stand in support of the management team and believe that the company remains well-positioned for long-term success.”
Monster announced in a statement issued on Wednesday, April 9, available to BrandSpur news brand, that it would not be providing any additional commentary on the Spruce report.
