Mutares Executives Increase Holdings in Company Stock, Defying Short Sellers

In September 2024, Mutares SE & Co. KGaA (MUX:GR), the Munich-based investment firm specializing in the turnaround and growth of small and mid-sized companies, came under intense market scrutiny following a critical report from short-seller Gotham City Research. The report alleged inconsistencies in the company’s financial statements, triggering a sharp selloff in its shares.

In response, Mutares swiftly issued a detailed rebuttal, attributing the discrepancy to a transcription error. Despite the clarification, investor sentiment remained unsettled, and short sellers held their positions, betting against the stock.

Insider Transactions Following Short-Seller Allegations

Demonstrating confidence in the company’s fundamentals and its underlying intrinsic value, key executives at Mutares increased their holdings through significant open-market purchases. The transactions unfolded as follows:

• Robin Laik (CEO): Purchased 15,000 shares at €21.32 per share, totaling approximately €319,796.

• Mark Friedrich (CFO): Acquired 5,000 shares at €22.139 per share, totaling €110,694. Additionally, Friedrich purchased bonds valued at €140,250 and €145,142, bringing his total investment to €396,086.

• Johannes Laumann (Executive Board Member): Bought 5,010 shares at €21.80, totaling €109,218, and an additional 2,500 shares at €22.70, totaling €56,750, bringing his total to €165,968.

• Axel Müller (Deputy Chairman of the Supervisory Board): Acquired 1,000 shares at €21.73, totaling €21,730.

• Volker Rofalski (Independent Supervisory Board Member): Purchased 1,000 shares at €22.05, totaling €22,050.

• Lennart Schley (Chief Operating Officer): Bought 2,400 shares at €22.283, totaling approximately €53,480.

Financial Performance, New Contracts, and Market Rebound

Mutares’ financial results came out aligned with the rationale behind these insider purchases. In fiscal year 2023, the company reported revenues of €4.69 billion, a 25% increase from the previous year. Net profit grew by 41% to €102.5 million, underscoring the firm’s operational efficiency and profitability. The company made another positive announcement by increasing its dividend by 29% to €2.25 per share, reflecting a strong commitment to shareholder returns.

Beyond strong financials, Mutares recently saw its stock soar following a significant surge in the value of its stake in Steyr Motors. The Austrian defense contractor, in which Mutares holds a 71% stake, secured a lucrative contract with a Brazilian client, propelling its shares up. This, in turn, sparked a rise in Mutares’ stock, which surged more than 60% since the beginning of the year and hit a high of €45.90 on March 18, 2025. The record-breaking performance highlighted Mutares' success as General Industrial Partners, a notable short seller, reduced its position from 1.11% to 0.19%, signaling a shift in sentiment.

Conclusion

The actions of Mutares’ executives serve as a strong indicator of the company’s intrinsic value. By investing their capital in the company’s stock and bonds, insiders demonstrated their confidence in the firm’s fundamentals despite skepticism by the market at that time. Later the market’s response to the company’s updates validated their decision, as both new contracts and strong financials propelled the stock’s recovery.