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Gotham Research Founder Fears For Safety After Article Published

Gotham Research Founder Fears For Safety After Article Published

by Mark MelinJuly 09, 2014, 1:36 pm

Gotham Research is considered an enigma on Wall Street – and this is how its founder, Daniel Yu, likes it.  When they first boomed onto the scene, really having been “discovered” within the last year, there was a “who are these guys?” whisper after their scathing research reports were quickly noticed and resulted in publicly traded firms collapsing in value.

Gotham Research’s cloudy background

That whisper turned into an overt scream yesterday when a major financial newspaper published an article outing the firm’s somewhat clouded background. In a statement to ValueWalk this morning, Yu expressed frustration that publicity could damage his business and even endanger his safety. This might not be that unfounded as Carson Block, another hedge fund short seller who publishes research on potential fraud, is said to have expressed similar concerns. Yu would neither confirm nor deny any personal details, however, ValueWalk independently confirmed the identity of Gotham’s founder, but agreed to leave out all details after a request from Yu. He is in the business of publishing research on publicly traded companies he believes are engaged in fraud. This indelicate focus resulted from his personal history of losing on stocks due to deceit and fraud, as was recently reported. This focus translates into the most celebrated research success in the firm’s short history: LETS GOWEX SA (OTCMKTS:LGWXY) (BME:GOW), a Spanish high flying tech stock.

Gotham Research’s report on GOWEX

After Gotham Research published a scathing research saying 90 percent of LETS GOWEX SA (OTCMKTS:LGWXY) (BME:GOW) revenue is “fake” and the company was engaged in accounting fraud, the stock immediately tanked nearly 50 percent – highlighting how, oddly, this firm with a short track record that had an almost non-existent public background could issue an opinion and collapse a publicly traded company. Gowex the firm being attacked wasn’t just any company, but a highly celebrated European technology success story. The CEO, who would later admit to committing accounting fraud, was honored by auditor Ernst and Young with Spain’s entrepreneur of the year in 2011.

Modern day vigilante in the finance world? Read more at http://www.valuewalk.com/2014/07/gotham-research-daniel-yu

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About bambooinnovator
KB Kee is the Managing Editor of the Moat Report Asia (www.moatreport.com), a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia; subscribers from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing. KB has been rooted in the principles of value investing for over a decade as an analyst in Asian capital markets. He was head of research and fund manager at a Singapore-based value investment firm. As a member of the investment committee, he helped the firm’s Asia-focused equity funds significantly outperform the benchmark index. He was previously the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. KB has trained CEOs, entrepreneurs, CFOs, management executives in business strategy, value investing, macroeconomic and industry trends, and detecting accounting frauds in Singapore, HK and China. KB was a faculty (accounting) at SMU teaching accounting courses. KB is currently the Chief Investment Officer at an ASX-listed investment holdings company since September 2015, helping to manage the listed Asian equities investments in the Hidden Champions Fund. Disclaimer: This article is for discussion purposes only and does not constitute an offer, recommendation or solicitation to buy or sell any investments, securities, futures or options. All articles in the website reflect the personal opinions of the writer.

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