Shares of OSI Systems closed nearly 30 percent lower on Wednesday after famed short seller Carson Block went after the airport scanner maker.
Block called OSI Systems "rotten to the core" during an interview with Bloomberg TV. He also said he has "smoking-gun proof that, when this company got a turn-key contract a few years ago in Albania — worth $150-$250 million top line — that they paid a bribe or kickback of almost half of that concession. To me, this is damning evidence."
Muddy Waters, Block's company, has a short position in OSI Systems.
He also noted that Muddy Waters estimates that 50-to-55 percent of OSI Systems' EBITDA comes from one contract in Mexico that is up for renewal next year. "If you own OSI, you're basically owning it for this one contract in Mexico that's up for renewal and should be looked at very closely," Block said.
OSI Systems declined to comment.
The company's stock had its worst day since Jan. 28, 2016 when it fell 31.8 percent.