Short-seller Glaucus says Blue Sky’s response to its research note is “woefully inadequate.”
The share price dropped sharply last Wednesday when Glaucus Research announced it was shorting Blue Sky, alleging the funds manager wrongly calculated the value of assets under management and charged exorbitant fees.
In response, Blue Sky referred the Glaucus note to the corporate regulator ASIC, saying this could be a case of market manipulation.
Blue Sky says the Glaucus opinion piece is materially misleading and flawed.
A short time ago, Blue Sky shares were down 4.1% to $8.12. Four weeks ago they were at $12.80.
Today, 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.”
Glaucus launched its response in a series of tweets:
Only after Glaucus exposed Blue Sky for overstating its fee earning AUM (as calculated in the same way as other alt. asset managers), that $BLA says such comparisons are unfair. But this is exactly how $BLA pitched itself to the market: as a Brisbane based wanna-be $KKR #ASX
— GlaucusResearch (@GlaucusResearch) April 5, 2018
Glaucus also released a 14-page rebuttal.
“We simply do not see how investors can have any confidence in a Blue Sky management team that cannot answer basic questions about its fee structure, AUM (assets under management) and historic performance,” Glaucus writes.
“Time and again, Blue Sky insists that we are incorrect, without providing any substantive rebuttal, analysis or calculations showing why we are wrong.
“Rather, Blue Sky claims what we consider to be a fabricated obligation to
maintain secrecy on all of its investments, its portfolio and its performance.
“We call on Blue Sky to point to the statute or requirement which prevents them from even high-level disclosures regarding their portfolio.
“The market should not hold its breath, because we suspect that no such requirement exists.”
In a statement to the ASX, Blue Sky says the second opinion from short seller Glaucus raises no new allegations.
Blue Sky says tghe second note also doesn’t identify any information which previously has not been disclosed and it doesn’t identify any errors in information disclosed by Blue Sky.
“The Board confirms our previous standing invitation to the Short Seller to meet with us to discuss and clarify any further issues which they may have,” says Blue Sky.