TransDigm Extends Recent Losses After Short Seller Citron Weighs In

By Ciara Linnane Markets MarketWatch Pulse

Shares of aircraft parts maker TransDigm Group Inc. fell another 4.5% Friday to lead the S&P 500 decliners, extending recent losses in a continued response to a report that the government is looking at ownership disclosures by subsidiaries. Short seller Citron Research added to the pressure with a comment piece Thursday saying the stock may be the new Valeant , referring to the troubled drug company. Citron assigned TransDigm stock a $140 price target, or about 40% below its current trading level, and said its "days of exploiting and deceiving the Federal Government are numbered". Citron cited the report by "The Capitol Forum" that said the Defense Logistics Agency is evaluating disclosures from TransDigm subsidiaries after 12 of them provided inaccurate ownership information in a filing that is updated annually. The company did not immediately respond to a request for comment from MarketWatch. But Citron said the company may be hiding its ownership to artificially inflate gross margins while avoiding price scrutiny from the government. TransDigm shares have fallen 7% in the year so far, while the S&P 500 has gained 6%.

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