Coffee colossus Starbucks said Tuesday that it was reviewing a report by a short-seller claiming that products made by Atlanta-based tea retailer Teavana are tainted.
Starbucks, which announced a bid to buy Teavana for $620 million last week, said in a statement to Bloomberg News that it was assessing the findings made by the Glaucus Research Group and would have no further comment.
The Glaucus firm acknowledged in a note to investors that it stood to gain if Teavana’s shares plummeted. It said independent tests have shown that Teavana’s teas have pesticides that exceed U.S. and European regulatory limits.
Teavana responded with a scathing statement Tuesday that rebutted the report and noted that Glaucus would benefit financially from the allegations. It said each batch of tea undergoes “rigorous third-party testing” based on international food safety standards and stringent European Union regulations.
A short-seller makes money if a stock that it targets drops in price.
Teavana’s stock was down about 4 percent on Tuesday afternoon.
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The light rain that moved back into metro Atlanta early Sunday was expected to intensify later in the day, and forecasters said heavy rain could cause minor flooding across north Georgia Sunday night through Tuesday.