Quindell retreats as Gotham City bags Spanish target

Gotham City Research bagged another scalp yesterday with news that Spanish target, Gowex, had filed for bankruptcy. Owners of shares in Quindell will know Gotham well after it published a series of allegations in April 2014 and the shares fell over 4% yesterday and are down a further 3% today to 198p. Some are thinking that if Gotham got Gowex so right, have they really got Quindell so wrong?

Yesterday, Gowex which is a wireless internet company admitted its accounts have been falsified for at least the last four years one week after Gotham published a report on the company. The founder and CEO of Gowex, Jenaro García Martín, resigned on Sunday after admitting fiddling the books. “I made a voluntary confession in court. I want to collaborate with justice. I will face the consequences,”, “I ask everyone for forgiveness. I am deeply sorry.” García Martín said on Twitter. Earlier this year the company was one of the best performing shares in the world with a valuation of around €2 billion, up more than 1,000 per cent since the start of 2013. The shares were suspended from trading last Thursday from the Mercado Alternativo Bursátil, a small company listing of the Spanish stock market.

Daniel Yu, the lead researcher of Gotham says he is driven by the desire to uncover the truth, but his critics say it is all about how much money he can make by associates shorting stocks, “The way we make money is by telling the truth – unlike our targets who make money by lying”

Yu’s report on Gowex put a target price of €0.00 and claimed that nearly all of the company’s revenues were false  and were overstated by as much as ten times and that claimed infrastructure did not actually exist with the number of wi-fi hot spots as little as 5% of that claimed. In addition, Gotham highlighted its auditors as being unreliable.

Gotham published a response to Gowex’s admissions on July 7th, pointing the fingers at other companies it had recently targeted. http://gothamcityresearch.com/

Gotham City is feeling like the Caped Crusader right now, but for other companies in the firing line like Quindell, investors must be hoping that Daniel Yu is the Joker!

Contrarian Investor UK

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