Carson Block, the renowned short-seller and founder of research firm Muddy Waters LLC, has taken a short position in St. Jude Medical Inc., denouncing the security of its cardiac devices in an effort that could derail the company’s purchase by Abbott Laboratories.
In a report to investors Thursday, Block warned that tens of thousands of Americans are living with ticking time bombs: St. Jude pacemakers and defibrillators that are easily compromised, causing potentially fatal disruptions.
“The allegations are absolutely untrue,” said Phil Ebeling, St. Jude’s chief technology officer. “There are several layers of security measures in place. We conduct security assessments on an ongoing basis and work with external experts specifically on Merlin@home and on all our devices.”
If proven, Block’s claims could derail Abbott’s plan to buy St. Jude or lead Abbott to renegotiate the deal. This could cause St. Jude shares to fall more than the 5 percent they declined in New York Thursday. The stock closed at $77.82, well below the original value of the deal, approximately $85 per share.
Abbott declined to comment, company spokesman Scott Stoffel said in an e-mail.
