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  • getintoh20 getintoh20 Jun 21, 2013 10:41 PM Flag

    Why Gotham's analysis has been wrong, comment mde by Gatsby1012

    Why Gotham's analysis has been wrong:

    1. They looked at the financials of various subsidiaries. Of course anyone who has ever done this realizes that it is a worthless endeavor unless one has the consolidating financials. Those aren't public. So Gotham didn't realize they were making error after error. They have a mountain of additional work on the subject that will never see the light of day because they realize they screwed it all up because they don't have the consolidating financials.

    2. They don't understand how the tax strategy works. That they only have to pay the low tax rates if the cash stays in the foreign subs. And it does stay there because they keep acquiring companies that are also domiciled in those foreign countries. That is how it all works and why it is all legal. Think about a Cayman islands account. You don't have to pay taxes on the money down there. But if you ever transfer it in, you would have to pay taxes as if it were earned here. EBIX just keeps it down there. And then they use it to buy companies that are also domiciled there. So they never have to pay the U.S. federal tax rate. It is fairly simple. Most software companies do this in some form or fashion.

    3. Regarding the charity stuff, of course the IRS filings don't tie because they don't have the reconciliation table showing unrealized gains/losses. When that showed up in the filing form in 2011, then everything ties going forward. Quite simple. What assets did Robin's charity hold? Well EBIX stock of course. Like 215k shares. The irony is it was the short reports that pushed the stock down, which led to unrealized losses, which led the charity IRS filings not to tie. Since Gotham realizes all this, they knew better than to take Robin up on his $50k offer to go through the books. They know they are wrong, or else they would go take the money. That's the tell. That is how you know they are lying.

    I could go on and on. Gotham has committed error after error. And now what are they left with? A couple of past employees that are disgruntled because Robin fired them and so they are telling lies about the company.

    EBIX will get those accounting firms to issue an opinion on the international tax strategy. The class action lawsuit is going so well for them that they filed to dismiss it all two days ago.

    When these clouds go away, this is not a $15 stock. It is not a $20 stock. It's $25+.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • who the hell is Gotham research? Some dude working out of his mom's basement, who posts stuff on Seeking Alpha, the mother of all mis-information sites?

    • In my opinion, Gotham's analysis was never intended to be accurate. Instead, it was intended to crash the share price...which it has now done twice. In all fairness, the longs that complained very loudly about the fact that $20 was not a fair price probably have as much to do with the investigation as Gotham or disgruntled employees. I think we agree that RR was taking advantage of shareholders at the $20 price. Ultimately, I think that is what he is being investigated for....not accounting fraud. I'm comfortable that GS hired the best forensic accountants to check the books in the US and abroad. Let's face it, EBIX will eventually go private. The question is, was $20 the right price. One thing I hope we can all agree on....RR cannot be trusted,

    • Comments by Gatsby1012

      It is also sounding like the main class action lawsuit down in Georgia, which is in the discovery phase, has gone so well for EBIX that they filed to dismiss it two days ago. Does anyone have access to PACER to see that?

      All Gotham has at this stage are a couple of disgruntled employees who Robin fired because they were incompetent and they are spreading lies about the company. They took them to Justice and that is why they initiated the probe. That is where Gotham is getting the quotes he is putting out on Twitter. That Robin doesn't like Americans, etc. Of course what Robin does is buys a company, then fires the execs (aren't needed), HR and other corporate employees (not needed) and all the highly paid incompetent developers that might be in the U.S. Then he replaces them with smarter, harder working developers in India or Singapore who will work twice as hard for half as much. Leaves quite a few disgruntled employees in the wake. And so they say oh Robin just doesn't like Americans. That's all Gotham has left at this point. The word of a few disgruntled employees. Comical. Won't take Justice long to look into the false allegations of these disgruntled past employees to see they are lying about this and that.

      • 1 Reply to getintoh20
      • Let's keep in mind that Goldman spent millions of dollars on a big 4 accounting firm and also on a forensic/fraud accounting specialist to go through the books with a fine tooth comb. The result was a clean bill of health. Not only did Goldman do their due diligence, but so did Credit Suisse as they were one of the debt providers. Morgan Stanley advised on the deal and provided the fairness opinion, so they presumably did some due diligence as well. Although likely not as in depth as Goldman and Credit Suisse. The international tax strategy is sound. And that is the only major financial risk to the company. They have transfer pricing reports done by E&Y International. And as long as the money stays overseas, they don't have to pay the U.S. federal income tax rate. And of course the money does stay overseas because they use it to make acquisitions. Since every other software company does the same thing (house the IP in Singapore, India, Australia), they use the overseas money to make overseas acquisitions. Pretty simple. Just a few things to keep in mind.

 
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