Iron Mountain (NYSE:IRM) tumbled 6% on Wednesday after short-seller Gotham City Research published a highly critical report that challenges the company’s financial reporting and leverage profile.
In its detailed note, Gotham accuses the records management giant of distorting key financial metrics, alleging that Iron Mountain adjusts its leverage and EBITDA calculations to make its balance sheet appear stronger. While the company reports leverage of roughly 5x, Gotham asserts the true figure is closer to 9x, calling the stock “uninvestible” and valuing it at “$23-$41 per share,” implying a potential 54%–74% decline from current levels.
The short-seller also argues that Iron Mountain’s adjusted EBITDA is overstated by 25–35%, and claims the company’s core storage volumes have been sliding in recent years. It further points to what it characterizes as dramatic price hikes — between 30% and 400% — in legacy services such as shredding and scanning.
Another major red flag raised in the report is the company’s dividend policy. Gotham alleges that Iron Mountain’s true payout ratio has “typically exceeded 200% over the past 12 years,” despite the company touting a 60% level, and says free cash flow has consistently fallen short of covering dividend distributions.
The note also highlights increased regulatory scrutiny, stating that the SEC began questioning Iron Mountain’s adjusted EBITDA methodology earlier this year in a series of correspondence letters. Gotham additionally cites heavy insider selling — more than $215 million in stock unloaded in recent years, with over half of that occurring in 2024 alone.
Gotham City released the report publicly shortly after presenting its thesis at the Sohn Conference in London.