Blue Sky says the Glaucus Research note, that argues the fund manager’s fee earning assets are significantly overstated, has inaccuracies.
The company went into a trading halt yesterday after its shares fell 13.4% to $10.40 on news of the research.
Blue Sky says it’s done an initial review of the analysis.
“There are a large number of factual inaccuracies throughout, including the assertions raised in relation to how Blue Sky calculates and reports its fee-earning assets under management, its investment performance and its fees,” the company says.
Blue Sky also notes the report includes the following statement: “You are reading a shortbiased opinion piece. Obviously, we will make money if the price of Blue Sky stock declines. The report and all statements contained herein are the opinion of Glaucus Research Group California, LLC, and are not statements of fact.”
Blue Sky says it will provide a response to the market on the issues raised in the report prior to the resumption of trading of shares.
Glaucus says it is short Blue Sky Alternative Investments and values the shares at $2.66, or about three-quarters lower than recent trading levels.
“We believe Blue Sky $BLA compensates for its overstated fee earning AUM (assets under management) by charging clients egregious management fees,” said Glaucus in a series of tweets.
“Based on our analysis, we estimate that $BLA Blue Sky’s real fee earning AUM is at most $1.5 billion, 63% less than Blue Sky’s reported figure.
“Over time, when Blue Sky $BLA inappropriately inflates the value of unrealised investments, its receivables balloon with uncollected performance and management fees and cash flows deteriorate despite record paper profits.”