POST 1 OF 2:
I am very disappointed in the way EBIX has handled this short attack and particularlly the Copperfield, Gotham, and Bloomberg articles. They are just doing a terrible job of responding to these allegations both on their merits but most importantly a dismal job on challenging the sources of this bogus information, and the share price is reflecting such. Yes, Ebix has responded minimally to the many of the merits of these allegations, but they need to do a lot more in getting the word out in a formal way as to why each and every one of these allegations is unfounded. Perhaps more imporantly and what I think would be most comforting to the martket, is they need to let the world know about the authors of these allegations. They need to expose the fact that Yu is the man behind both the Copperfield and Gotham articles and that he has a history of these tactics of distoring and falsifying information to profit from driving down the share price of other companies. They need to let the world know how the shorts have been loading up before these articles were published in a thinly veiled attempt to manipulate the stock. They need to get the word out that Gotham (and probably Copperfield also) is a bogus research company which was formed only shortly before the SA article it authored was published and that is has never covered a single other stock or authored any other article and is a sham company created exclusively to spread false and misleading information to manipulate the stock. They also need to let the world know that Bloomberg published this claim that the company was being investigated by the SEC which EBIX continues to flatly deny which was first based on 3 aonymous sources which was later revised to just 1 anonymous source that may likely be Yu. I think Rana should arrange to have himself interviewed to discuss these matters and publish the transcipt of the interview like he has done several other times.
I've seen viable companies get embroiled in litigation and get sucked under. The legal costs plus the distraction of critical management focus, were the cause. Only the lawyers won.
I don't want that to happen to ebix.
As long as the company continues to grow , i'll happily sit out the BS storm and wait patiently.
Corporations and executives have to abide by the laws for public disclosure. And then they need to not reveal anything to the competition. Shorts are not governed by laws. Courts interpret short lying as opinion and they get away with their lies. Try giving opinion as an executive and you would get hung. As for Daniel Yu, he's just a big boy's lackey. He's the one to take the heat as the big boys hide and collect the money. With 41% of float short, this is a big operation with a lot more brains and money behind it than Yu has.
Sentiment: Strong Buy
With all due respect, you are very incorrect. I am very familar with defamation, fraud, false light, and a variety of applciable claims as a practicing litigator for over 20 years. Shorts are definitely governed by the law and can be sued for both false statements of fact and unreasonably false opinions which are made in the form that a reasonable reader would rely on such opinions as being communicated as fact, such as the opinions made under the guise of a purported financial research, such as both the Gotham and Copperfield articles. The false and misleading allegations made by the Gotham and Copperfield articles are without question actionable under the law, and based on what I have read it should be fairly easy to establish civil liablity against their author(s). Collectablity of any judgment obtained, however, may be a bigger challenge, but as I have stated before proving the allegations false even without ultimately collecting the judgment may in and of itself make such a lawsuit worthwhile b/c of its effect upon calming investor fears and once and for all establishing that these allegations are nothing more than misrepresentations deliberately made with the intent to profit from them by causing the share price fall sharply.
Something is definitely up and find it a strange coincidence that this sudden spike share price and volume happened the day after my call with the Director of Investor Relations. As I indicated below, I think I made an impression and hope that he passed on my views up the chain of command and the company finally decided to put in play the unimplemented stages of their "plan" to deal with this short attack. We will know soon enough, but I smell that the company is about to announce something significant.
Well, here is another update. Steve, the Director of Investor Relations, just called me after he read this thread. To be fair, he indicated that he never conceded that EBIX has done a bad job at responding to the recent short attack allegations. I thought I was clear in my post that I interpreted his responses that way and that he never did so expressly concede this. To be fair, he never expressly agreed that EBIX is doing a bad job at responding to the allegations, and I am the only person during the call who expressly stated such, but I did interpret his responses to my comments as somewhat of a tacit, although not express, agreement with my view. During this call back, I did get rather blunt and stated directly to him that I strongly believe that EBIX has done a bad job responding to these allegations and went even further and said that I also thought that this failure was in large part his responsibility. I appologized for being so blunt and direct, but I told him that this was part of his job responsiblity and that I have a lot of money invested in this company which I believe gives me the right to call it like I see it. I told him that a big part of his job was to communicate with the investor community, and the company's failure to respond adequately to these allegations was directly something he is accountable. He said he understood my view and then said "stay tuned" which I interpreted as him indicating that EBIX had something big in the works to respond to these allegations which would be made public shortly.
At least he responded to you. Like you, I am also a big share holder and have sent him/Raina an e-mail followed by a reminder. I have yet to receive a reply. In my reminder e-mail, I was very blunt for not responding. Let us see if he responds. If he does not, I will put my e-mails on tis board for all to see.
I have made my goals for EBIX for the next quarter. If they are not met or exceeded I will be gone. The goals are modest. Ebix has been dead money for to long a period. Remember when the stock split 3 for 1 and they were trading above 60.00 per share. Ebix has been dead money way to long.
Sentiment: Strong Buy
Continuation of my call with Director of EBiX Investor Relations:
Interestingly, Steve indicated that the company has a plan in place to deal with this short attack and intimated that many (or at least some material components) of this plan have yet to be implemented so I expect to see EBIX soon to do other things to challenge this short attack. I felt good about the call in that Steve at first seemed to take a tone that the company had everything under control and later seemed to acknowlege that it was not doing enough and particularly understood that the company has not done a good job to get enough information out there to let the world know about Yu, Gotham City, and Copperfield and their histories. I am sticking with EBIX for now and look forward to seeing the strategy in place be fully implemented and hope to see a more aggressive PR compaign to challenge this #$%$ going forward. Thanks, again, Steve for your time and willingness to listen my views.
Well, I just got off the phone with the Director of EBIX investor relatiohs where I had a very informative call. First, thank you Steve for your time because I know you are reading this. All of you should know that EBIX closely monitors this board which Steve generally described as one of the most informative places on the internet for information about EBIX. Second, Steve also indicated that HockePlayer12 (I think I have his user name right) who posts regularly "has it right.", and Steve clearly indicated that HockeyPlayer12 understood the allegations and his responses were "dead on." He also seemed to already know all about Yu, his history, Gotham, Copperfield, etc. as I indicated above. I spent a lot of time discussing my views as posted above and that the company was not doing a good job responding to these allegations. After some back and forth, I think Steve really understood and kind of conceded that the company is not doing a good job responding to this short attack. Interestingly, he implied that there MAY be some formal legal action initiated but that the company would not preannounce any such legal action. I strongly emphasized that the company needs to get out there and get the word out not only that these allegations are false and misleading on their merits, but to let the world know about the utter lack of credability of the sources. I made it clear that if you look up EBIX under any search engine all you find is this negative information without any of the respones of the company or information challenging the sources which is the company's failure and is why the stock is not recovering. I emphasized the disconnect in the marketplace's understanding between the allegations and Ebix's response is clearly evidenced by the SA article today which said that these allegations make investing in EBIX too scary and failed to include any of EBIX's responses. I think he got it and said he would pass my views on to the Board. Cont....
Stuart, excellent point about looking up Ebix on the internet, any new investor would be terrified of all the allegations. The first thing I want to see when I look it up is "Ebix files lawsuit against shortseller Daniel Yu and Bloomberg. Also, in light of the fact that the PR dept. reads this board, I would like to apologize for calling them "feckless donkeys" and similar things.
Post 2 of 2:
I own an insane number of shares of EBIX worth even at the current share price in mid six figures. I indicated such when I contacted IR and hope I get a response. If I do not get a response and some indication that EBIX is going to be more proactive here, I may decided to take my medicine here and move on. I love this investment, but I fear that the value of this company will never be realized within any reasonable time frame in light of the company's inability to effectively challenge these lies and distortions. Certainly, the big boys have probably figured out that much of these allegations are false, but the retail investors have not and are way too scared to touch this stock which is in my view why the stock has not been able to rebound. The company cannot overcome this short attack without getting some interest from your everyday investor which in my view cannot happen until the company does a better job of dealing with the fear created by these allegations. Then, I would expect some analysts or some real financial research companies to write articles stating that EBIX is undervalued and a very attractive investment which should attract retail investors and ultimately help the stock rebound.
If intangible assets and goodwill are removed from the balance sheet, EBIX net tangible assets (NTA)/share is negative 32 cents. Cash flow is trending down. Cash flow/share and NTA/share are two important checks to understand how strong the books are. It is hard to fake these in the books. Since I was once defrauded in a stock swindle, I always check these first before looking at anything else. It is not too hard to cook the books and cover it by claiming high goodwill and intangible assets.
When researching a stock, check the increase or decrease in cash flow per share over a period of years. If cash flow is generally insufficient to cover dividends and EPS then be suspicious. Also, check NTA/share. Book value can be faked by claiming high intangible assets and goodwill. In my research, I always discount all goodwill and intangible assets. If these are checked and look okay, then you can further research the stock. I am doing much better in my stock trading since I have started doing these simple checks. I follow the stocks that fail my initial research to validate my opinion.
Sentiment: Strong Sell
I have an insanely large number of hares as we'll, and like you, I am beginning to lose patience with this investment. Have been accumulating shares since 2009 and I am now approximately .40 below my average per share cost in the stock. No matter how much I think the company is performing well, the stock has not been a good investment. Growing weary while watching other stocks do well!
Great stuff Stuart! I concur wholeheartedly! I also own a substantial state in EBIX and have been patiently waiting for it to appreciate for almost 3 years while is has essentially flat-lined! In order to attract investors the company needs to sell itself, which it has failed to do! Understood that the primary task is to grow the business however, the responsibility of any CEO is increase shareholder value! Raina has done an excellent job in the past however, it is essentially 'what have you done for me lately' In EBIX's case while the company has performed exceptionally well especially during the turbulent economic times of the last several years the stock has NOT recovered or reached the price it was trading at since the initial attack article posted almost 3 years ago! I Consequently, it has been highly manipulated and heavily shorted ever since. Why - because I think it is easy to do and the shorts/manipulators realize this! Until the negativity and cloud of doubt concerning the company abates I believe investors or the street in general will have little interest in investing in the company! Let us know if/when you hear anything. Perhaps I will follow suit or we longs can rally collectively and demand that the company do more!
Sentiment: Strong Buy