Asset manager Blue Sky is back on the market and the stock is getting battered

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  • Shares in Blue Sky Alternative Investments tanked when the company resumed trading after responding to allegations by Glaucus Research.
  • At at an analyst call this morning, the funds manager raised the issue of “market manipulation”.
  • It says: “Blue Sky’s performance and management fees are entirely consistent with market practice in Australia.”

Shares in Blue Sky fell were hammered again when the fund manager resumed trading after a halt to prepare a response to a short trader’s analysis.

The shares were down as much as 26% at one point but recovered a little, and a short time ago were trading down 18% at $8.52.

The funds manager says it “categorically rejects” allegations by Glaucus Research that it wrongly calculated the value of assets under management and charged exorbitant fees.

Blue Sky has referred Glaucus Research to the corporate regulator, ASIC.

“We are concerned that this may be a case of market manipulation,” managing director Robert Shand told an analyst call this morning.

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In a series of tweets last Wednesday, Glaucus announced it was shorting Blue Sky and published its research.

Blue Sky shares fell more than 13%, prompting the company to call a trading halt.

Glaucus believes that Blue Sky is overvalued by the market by as much as 77% and that its assets under management are only worth $1.5 million, not the $4 billion claimed.

However, Blue Sky rejects the allegations.

“The calculation of Blue Sky’s fee-earning AUM, which is in excess of $4 billion, is entirely in line with market practice in Australia and Blue Sky has adopted the same approach since it listed,” the company said.

“Blue Sky confirms that its approach is consistent with industry practices in Australia and the approach taken by a broad range of other ASX listed businesses.

“Blue Sky’s performance and management fees are entirely consistent with market practice in Australia. These fees are fair, both with respect to their quantum and the way they are structured.

“They are fully and fairly disclosed.”

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