Signet stock plummeted more than 20 percent since a BuzzFeed
report May 25 alleged, based on complaints from customers of Kay Jewelers, a
Signet subsidiary, that diamonds the company took in for servicing had been
“swapped”
for lower-quality gems.
Compounding the jeweler’s troubles, James Grant’s
influential investment newsletter on June 2 raised concerns over the extent to
which the company uses its credit operations to boost sales. The report cited a
short seller, according to Bloomberg.
Short sellers sell stock that they do not own with the
intention of making a profit by buying it back later at a lower price.
Light
(pictured) said Signet suffered a “targeted attack” by short sellers,
who led an “orchestrated campaign” to amplify the controversy, Bloomberg
reported.
“We have to make it right and get on top of social media to
make sure that the other side of the story is told,” Light added.