Andrew Left’s Muddy Waters announced a short position in FTAI Aviation (FTAI). The company’s financial reporting is “highly misleading,” as its revenue from “true” maintenance and individual off-the-rack module sales are “materially lower than reported,” Muddy said in a short report. The firm believes FTAI is misleading investors by reporting one-time engine sales as Maintenance Repair and Overhaul revenue in its Aerospace Products segment. Muddy estimates 80% of FTAI’s Aerospace Products adjusted EBITDA is gains on sale, which is largely from selling whole engines. “Fortress sold significant stock in a May 2024 secondary offering on the back of FTAI’s misleading narrative,” the firm contends. Shares of FTAI Aviation are down 5%, or $7.22, to $146.07 following the report.
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