Muddy Waters CEO Carson Block yesterday revealed a short position against California-headquartered Elf Beauty, questioning the authenticity of its revenue data and alleging overstated sales. Elf reported $300 million in Q2 revenue and $45 million in adjusted profit, beating expectations, but Block attributed rising inventory to weak demand. Following the news, Elf’s shares dropped 16% to $103, down 23% over six months. Known for exposing fraud, Block’s short positions typically trigger significant stock declines. Elf’s market cap now stands at $6.7 billion.