Shares of Bunge Global SA (NYSE:BG) declined more than 2% in premarket trading Wednesday after short-selling firm Spruce Point Management released a report urging an independent investigation into the company’s accounting practices and financial disclosures.
Spruce Point published what it described as a forensic analysis of the agribusiness group, arguing that the S&P 500 constituent has become a complex roll-up that has struggled to create long-term shareholder value without relying on external financing.
According to the report, Bunge has produced a cash flow deficit of about $1.6 billion since 1999 after accounting for capital expenditures, investments, and asset repositioning activities. Over the same period, the company distributed $4.7 billion in dividends and carried out $3.9 billion in share buybacks, which Spruce Point claims were funded largely through debt.
The short seller also argued that Bunge’s oilseeds business, historically its largest contributor to EBIT, is facing increasing pressure. In addition, Spruce Point said the company has not addressed the potential impact of GLP-1 weight-loss drugs in its SEC filings or earnings calls, despite supplying customers in the food products industry that could be affected by shifting consumer demand.
Based on its analysis, Spruce Point estimated that Bunge’s shares could face potential downside of 55% to 80%, warning of significant risk of underperformance relative to the broader market.
The report also criticized Bunge’s $10.6 billion acquisition of Viterra from Glencore, announced in June 2023, describing the transaction as an attempt to divert attention from underlying operational challenges. Spruce Point said the deal has so far fallen well short of expectations.
Spruce Point called on Bunge’s board of directors to launch an independent review of the company’s financial reporting and provide additional transparency around its accounting practices. The report also raised concerns about the company’s 2030 earnings-per-share targets and suggested that insider selling of as much as 30% of the stock could occur in the near term.
Bunge Global SA is a multinational agribusiness and food company incorporated in Geneva, Switzerland, with headquarters in St. Louis, Missouri. The company is a major soybean exporter and operates across grain trading, food processing, and fertilizer markets. Despite Wednesday’s decline, Bunge shares have gained roughly 70% over the past year.