A short seller just released a report on an advertising company and the stock is falling like a stone

Gotham City Research released a short report on MDC Partners on Friday, and the stock is down 11% after falling as much as 16%.

MDC Partners is an international advertising and marketing firm.

Mdc partners stock chartYahoo FinanceMDC Partners on Friday

Gotham generated a whole laundry list of grievances against the company, slamming its growth numbers, saying that it understates its debt, and pointing out a bunch of executive departures.

Here are a few of the highlights:

  • 2015 organic revenue growth is ~1.5%, not 7.2% as reported. Organic growth well below industry averages.
  • MDCA’s true Debt is understated by ~$300 million, or 23% of stated Debt as of 2015.
  • At least 42%-53% of reported profits are suspect.
  • 7+ executive departures within recent quarters. At most 3 of Crispin Porter Bogursky’s original 13 partners remain.
  • BDO and David Wiener & Co are quasi-captive entities MDCA used to structure its dubious accounting strategies.
  • Tax deductible intangibles and goodwill have declined from 100% tax deductible in 2013 to only 16% in 2015.

Business Insider has reached out to MDC Partners. We’ll update this post if we hear back.

You can check out the full report here.

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