Everyone and their dog has jumped out at BLA following this report, assuming it is gospel. I think it's really important to take a balanced view here in light of some of the alleged wrongdoings.
I would particularly like to point out that Glaucus is not Jesus. Last year they came out with a high conviction call on Fullshare (HK: 0607) and it was an absolute disaster. The stock initially dived on the back of their bearish research and then recovered very rapidly and is now close to new all time highs. I hope they covered their shorts in time because it wouldn't have been pretty. To top it all off they blamed the rise in SP to "market manipulation" lol.
The 3 key points that Glaucus are touting are:
1. Fee earning assets under management are overstated (gross value not equity value is stated supposedly)
2. Performance in PE/VC investments has been artificially inflated (they cite few exits to date and the use of subsequent funding rounds to prop up valuations)
3. Fees charged to investors are unacceptably high and unsustainable (they mainly refer to upfront expenses incurred for PE/VC investments here)
I have started digging through this report and have already found some glaring errors.
Vinomofo (from p.42)
"Blue Sky forecasted that Vinomofo would generate $81.2 million of revenues in the fiscal year ending June 2017. But publicly available financials state that Vinomofo’s revenues were only $43.7 million, 46% below Blue Sky’s forecast for that year"
WRONG: Vinomofo reported FY17 revenues of c.$70m, ~10% off original estimates (source: AFR
http://www.copyright link/technolog...e-forecast-amid-consolidation-20170716-gxce4v)
"In addition to missing revenue forecasts by a wide mark, Vinomofo reported a massive pre-tax loss of $6.7 million (almost double the year prior)."
WRONG: Vinomofo has been running at positive EBITDA since inception (unlike many other startups out there)
"Rather than a successful investment justifying a markup, Vinomofo’s cash crisis is alarming. At the end of FY 2017, Vinomofo only had $2.2 million in cash left."
If this was the case the company would've gone insolvent by now given supposed cash burn was running at ~$6.3m p.a. Instead, all indications are that the business continues to grow more profitable and is currently taking off in several international markets including Singapore and New Zealand.
Granted they have supposedly done their homework and based these calls off of statements from ASIC Connect, their analysis is clearly off on Vinomofo. Makes you wonder where else they have made glaring mistakes.
