Blue Sky shares take another big hit on Glaucus stoush
Written on the 5 April 2018 by Ben Hall
Blue Sky shares are trading down by a further 20 per cent after short seller Glaucus Research launched another attack on the Brisbane-based investment company.
Trading in Blue Sky Alternative Investments shares (ASX: BLA) was halted for around 50 minutes as the bitter stoush between the two companies continues with claims and counter-claims.
Just before the close of trade on Thursday, BLA shares were at $6.72 which represents a total drop of 41 per cent since Glaucus issued its negative and critical report on Blue Sky last week.
The US based hedge fund released a report on Wednesday last week alleging Blue Sky had "wildly exaggerated" its assets under management (AUM) and declaring its share price is only worth $2.66.
Blue Sky went into a trading halt as it prepared its response which it released to the market on Tuesday night, denying it had fudged its numbers on AUM and also called on the Australian Investments and Securities Commission (ASIC) to launch an investigation into the short selling hedge fund.
Glaucus issued a rebuttal at around midday on Thursday saying: "Rather than address our report on its merits, Blue Sky has doubled down on obfuscating simple details about its business. Instead of transparency, Blue Sky has fallen back on threats and recriminations.
"We simply do not see how investors can have any confidence in a Blue Sky management team that cannot answer basic questions about its fee structure, AUM and historic performance."
At 1.30pm, Blue Sky continued the tit-for-tat claims by addressing Glaucus' "second opinion" by saying it raises no new allegations.
"The Board confirms our previous standing invitation to the short seller to meet with us to discuss and clarify any further issues which they may have," Blue Sky says in its ASX statement.
Glaucus says its analysis estimates that Blue Sky's AUM does not exceed $1.5 billion, 63 per cent less than the company's reported figure.
In February, Blue Sky's CEO Robert Shand (pictured) delivered a first half underlying profit by 59 per cent to $16.1 million and reported its its fee-earning AUM rose by $1.2 billion to $3.9 billion.
The company also said it was targeting AUM of between $5.5 billion and $6 billion by June 30, 2019, with the growth to be driven by demand from institutional investors.
Previously Glaucus launched a similar damning report on the now-collapsed sandalwood grower Quintis, saying in March 2017 that the company had a "ponzi-like structure".
That research prompted the price of the stock to plunge and receivers were appointed to Quintis in January of this year.
Business News Australia
Author: Ben Hall