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.
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.