Oatly IPO'd at $10B, then a short seller and the ASA took the froth off the oat milk

Oatly was a Swedish oat-milk maker from Malmö that became the face of the plant-based dairy revolution. In May 2021, the company went public on Nasdaq at $17 per share, valuing it at approximately $10 billion. The first trade was at $22.12. Underwriters included Morgan Stanley, J.P. Morgan and Credit Suisse.

Two months later, on 14 July 2021, short seller Spruce Point Capital published a report alleging Oatly had overstated revenue and margins, had accounting problems, and had misled consumers about its sustainability claims. The stock briefly fell below the $17 IPO price. Several class-action lawsuits followed.

The problems were not only financial. In 2020, Oatly had faced consumer backlash after selling a $200 million stake to investors including Blackstone, due to Blackstone's links to Amazon deforestation. In early 2022, the UK Advertising Standards Authority banned several Oatly ads over misleading environmental claims.

In 2022, Oatly reported revenue of $722 million and a net loss of $393 million. The company that had been the darling of the plant-based movement was losing more than half its revenue every year. China Resources held 45.9% of the shares. The oat milk was real; the $10 billion valuation was not.