- Blue Sky shares have rallied back after falling 20% in early trade.
- The market capitalisation is now about $350 million, down from more than $990 million a week ago.
- The war of words with short seller Glaucus Research continues.
Shares in Blue Sky, the funds manager which was the subject of a brutal note from a short seller, fell hard again when markets opened this morning.
The stock was down almost 20% to $4.51 shortly after 10am, but bounced off its lows in midday trade. Shares in the company then rallied into positive territory, climbing by as much as 5% before closing at $5.80 — a gain of 3.2%:
Blue Sky’s market capitalisation has dropped by more than half over little more than a week after Glaucus Research last week announced it was shorting the stock, alleging Blue Sky wrongly calculated the value of assets under management and charged exorbitant fees.
Blue Sky also announced on the ASX this morning that two of its directors had purchased shares in the company over the past two days.
Director Michael Gordon purchased 15,000 ordinary shares on the 4th and 5th of April for a total consideration of $120,738.40. Philip Hennessy purchased 5,000 ordinary shares at a cost
The California-based 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.
The Glaucus adjusted share price for Blue Sky is $2.66.
Blue Sky rejected the allegations and referred the Glaucus note to the corporate regulator ASIC, saying this could be a case of market manipulation.
However, yesterday Glaucus released a second note saying Blue Sky’s response to its initial research was “woefully inadequate”.
Glaucus says: “Rather than address our report on its merits, Blue Sky has doubled down on obfuscating simple details about its business. Instead of transparency, Blue Sky has fallen back on threats and recriminations.”
In a statement to the ASX, Blue Sky says the second opinion from Glaucus raises no new allegations.
Blue Sky says the second note also doesn’t identify any information which previously has not been disclosed and it doesn’t identify any errors in information from Blue Sky.