The report by hedge fund and short-seller Spruce Point Capital Management accused Nuvei of a lack of transparency, acquiring a U.S. company that had exaggerated its growth, and being linked to failed crypto exchange FTX. Spruce Point said in its report that it would short Nuvei’s stock—or bet on the stock to decline—due to a potential 35% to 50% drop in value. 

Following the report’s release, Nuvei’s shares fell about 2%. Its stock had been up by nearly 65% since the start of 2023.

One of the concerns highlighted by Spruce Point included Reynolds’s investment in the company. It said the investment was announced while Nuvei was still dealing with the aftermath of its ties with FTX being exposed, suggesting that Nuvei was using the news as a distraction.  

“Its [Nuvei’s] announcement that accomplished actor Ryan Reynolds made an ‘investment’ in Nuvei was a timely promotional endorsement especially after we found broken links tying Nuvei to FTX,” the report said, referring to internet hyperlinks that connected a top Nuvei executive to the FTX fraud. 

“We first noticed Nuvei made an unusually large $25 million restricted stock grant to an unnamed third-party consultant and did not disclose the nature of the services. Nuvei also backdated the recognition of the award,” Spruce Point’s founder and chief investment officer Ben Axler told Fortune, suggesting that Reynolds may have been given his stake in exchange for promotional duties. Axler said the company was not being upfront about the nature of the Reynolds’ investment and whether it came from his personal funds.

“The announcement of the partnership with an actor like Reynolds reinforces our view that Nuvei’s underlying business is struggling,” Axler said.

Nuvei told Fortune in an earlier email before the short-seller’s report that it couldn’t disclose details about Reynolds’s stake because he is a private investor. Nuvei did not immediately return Fortune’s request for comment regarding the new short-seller report.

This isn’t Nuvei’s first clash with Spruce Point. In December 2021, the short seller released a similar report with a “sell” recommendation noting that the fintech company faced “40% to 60% long-term downside risk.” That report highlighted a number of alleged shortcomings in Nuvei’s business, including top management it said shouldn’t have been hired and poor financial performance.  

At the time, Nuvei’s board denied all allegations of wrongdoing. The claims were all “misleading, false, or unrelated to Nuvei’s business,” the company said in a statement released a week after Spruce Point’s report. 

“The allegations made against Nuvei are malicious and unfounded,” CEO Phil Fayer wrote. “We will not allow the report to distract us any further and we remain unwavering in our commitment to drive growth and value for our shareholders.”

Among the other concerns raised in the latest report is the $1.3 billion acquisition of Paya, an American fintech company, announced in January. The deal was Nuvei’s effort to expand its reach to U.S. users. 

Spruce Point noted that the acquisition would “fail miserably in helping Nuvei achieve its financial targets,” adding that Paya allegedly only had 80,000 customers, after stating in 2020 that its user numbers had declined from 1 million to 100,000. It also said that Paya’s growth faced many hurdles, which could pull Nuvei’s business down too.

“In our view Nuvei’s leadership lacks credibility and is undisciplined with spending, yet its bankers allow it to conduct continued wasteful activities,” Spruce Point’s report said. “We believe Nuvei’s $1.3 billion acquisition of Paya appears to be a marriage between two weak industry players and is concealing Nuvei’s underlying organic deterioration.”  

Spruce Point said, “Nuvei’s investors, bankers, auditors, and analysts are mistakenly supporting a troubled company.” Axler told Fortune that a special committee should be set up to look into the report’s findings along with an independent forensic firm.

In previous reports, Spruce Point has attacked other companies, including shoe brand Skechers and artificial intelligence company C3 AI. 

While Spruce Point has a long track record of targeting companies, investment bank Keefe, Bruyette & Woods thinks the report leaves unanswered questions. 

“Like its last report, we believe the short-seller is grasping for irregularities without citing material and provable issues,” Sanjay Sakhrani, an analyst at the investment bank, said in a note to investors, Bloomberg reported. “While we respect the investor’s investigative approach, it’s hard for us to connect all the dots and get on board that anything is actually wrong with the company.”