Update 12:28 Eastern: I am now hearing that Gotham did not publish a report. Anyone who can corroborate one way or the other? It seems the email alerts are sent to 2,349 people as of just now…. interesting – and one of them is me.
Click on image to read it: The Gotham City Report has not shown up on SeekingAlpha yet – likely because it’s a Pro Report, that is distributed to paying subscribers around 24 hours prior to their making it available to us unwashed masses. Another great strategy to increase the impact (damage) that their rumor mongering can have on the share price. Note that Greg Farrell at Bloomberg seems to be carrying the short’s water as he’s quick to report extensively their allegations – but silent on favorable developments like the dividend re-initiation and the preliminary settlement of the class action suit – with no admittance of wrong-doing. In our view that’s a crushing blow to the all the allegations to date.
The class action was based on the unverified allegations in short reports hosted on SeekingAlpha (Gotham City and another). That triggered a stock drop that pulled in the ambulance chasers and got the class action suit moving forward. Adding to the insanity, the Dept of Justice launched an investigation that was based on the Class action allegations (it seems someone had been actively pushing the DOJ to get involved and uncover all this wrong doing… wonder who might have done that?) – so you have DOJ actions that are based on issues who’s genesis is found in anonymously authored short reports that were masterfully launched from SeekingAlpha. Gotham’s 3 part report on EBIX in March 2011 is worthy of the Pulitzer equivalent of the highest honors one can give to a masterfully spun tale of nefarious doing built on a litany of half truths, missed represented facts and clever omissions.
While we’ve owned the stock for over 10 years – and while it’s been a spectacular investment – over the past 3 years we have suffered true financial injury from the short sellers very effective campaign, what galls us most is how the markets seem all to happy to facilitate the process and the regulators rough up the victim!
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