TransMedics Group, Inc. (TMDX) shares plummeted 16.51% in Friday's intraday trading session after short seller Scorpion Capital disclosed a short position on the company, accusing it of fraudulent practices involving kickbacks, billing fraud, and unreported device failures.
According to Scorpion Capital's short report, TransMedics allegedly operates a "mafia-style" scheme involving off-label device misuse and customer attrition. The short seller claims it will file a petition with the FDA to request a suspension of the premarket approval for TransMedics' Organ Care System, a device used to transport, preserve, and assess organs for transplant.
TransMedics has not yet responded to the allegations made in the short report. The company's stock had already fallen around 21% in 2024, and the latest plunge adds to its woes amid concerns raised over its practices and financial performance.
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