© Gotham City Research LLC

September 27, 2018

Question: If Optavia Fuelings contain more contaminants than peer products and everyday food, so what?

Answer: Gotham City Research has obtained irrefutable evidence that Medifast/Optavia products are causing illness, (including gastrointestinal and gallbladder problems). The Company is apparently engaging in a cover-up of those problems and has disseminated misleading information. We have posted a recorded conversation, containing Optavia Sales Rep #1’s admission that Optavia products are causing gastrointestinal issues.

The recording with subtitles is available here: https://youtu.be/dDNYYwURNLA.

Please read the report to learn more:

September 20, 2018

GOTHAM CITY RESEARCH’S OPINIONS:

  • 21% to 74% of Optavia products contain contaminants.

  • Optavia prices will decline, as prices are 2x-4x more expensive than peers’ products & programs.

  • Nearly all Optavia products are not manufactured by the company, contradicting claims otherwise.

  • MED will be required to add warning labels to its products.

  • MED’s Optavia products (its “Fuelings”) will require recalls and/or third-party testing.

  • Shares will decline 62%-86% the current prices

GOTHAM CITY RESEARCH’S OBSERVATIONS:

  • 85% of Optavia samples tested by a leading lab exceeded the maximum allowable dose level for lead, per Prop. 65.

  • 23% of the Optavia samples tested exceeded FDA maximum daily intake levels for lead.

  • The Optavia products we had tested contained higher levels of toxic metals than 93% of 133 best-selling protein powder products tested by the Clean Label Project.

  • The average Optavia products tested contain higher lead levels than all 283 ev...

October 12, 2017

  • What has Criteo been hiding?

  • And why is Criteo destroying evidence?

                                                                                                                                              

Criteo’s undisclosed acts of desperation show that Apple’s ITP is a game changer.  Read to learn more:

September 21, 2017

Last week we released Method Media Intelligence’s report on Criteo.  Today, Gotham City Research is releasing its first report on Criteo, explaining why we believe that ad fraud is a material problem for Criteo, and that the MMI observations are not isolated examples.  

                                                                                                                                                           

Specifically:

  • Over 50% of websites using Criteo are of suspect quality

  • Criteo is worse than its peers based on our study of its websites

  • Clients can cut 50%+ spending on Cr...

September 15, 2017

Gotham City Research is releasing Criteo SA (NASDAQ: CRTO): Is Criteo Malware? And Why Does Criteo Refuse to Reveal to its Clients Where Their Ads Are Placed? in two parts:

  • Part I features Method Media Intelligence’s Criteo Report (released today)

  • Part II features Gotham City Research’s Criteo Report (released next week)

...

GOTHAM CITY RESEARCH HAS REASON TO BELIEVE THAT:

  • AAC has used 20+ undisclosed related parties & dubious accounting to overstate & smoothen profits since 2014.

  • At least 20 undisclosed related party suppliers are owned or managed by AAC CEO’s family members or employees.

  • These undisclosed related party suppliers are not listed in Apple’s supplier list, despite some claiming otherwise.

  • Some of the undisclosed related entities supply the same products as AAC does, are based in the same locations as AAC is, & hire employees under AAC’s name.

  • AAC has used these hidden entities to evade Apple’s labor standards specified in the Apple Supplier Code of Conduct.

  • Apple (and other parties) will conduct independent investigations, & validate our findings. As a result, AAC’s profit margins will decline, converging to its peers’ levels.

  • AAC is in violation of Hong Kong listing rules, Apple’s supplier code of conduct, and its own representations.

OBSERVATIONS:

  • ...

GOTHAM CITY RESEARCH’S OPINIONS:

  • AAC has used 20+ undisclosed related parties & dubious accounting to overstate & smoothen profits since 2014. In this regard, AAC reminds us of Longtop Financial Technologies.

  • AAC has used these hidden entities to evade Apple’s labor standards specified in the Apple Supplier Code of Conduct.

  • AAC’s share price will initially decline to 40 HKD – 50 HKD per share, as the undisclosed related party supplier revelations are digested.

  • We see far greater downside potential to the share price if the company were to concurrently experience the same problems that other Apple suppliers have in the past, e.g. increased competition, pricing pressure from its customers, wage inflation, etc.

Example #2: ZhongBeiTong Magnetic Materials 沈阳中北通磁科技股份有限公司

Gotham City Research has reason to believe that ZhongBeiTong Magnetic Materials is a significant undisclosed related party:

  • The company estimated it would enter into RMB 150 million transactions wi...

Why are AAC Technologies LTD’s – a supplier of Apple – reported profit margins higher AND smoother than Apple’s?

GOTHAM CITY RESEARCH HAS REASON TO BELIEVE THAT:

  • AAC has used 20+ undisclosed related parties & dubious accounting to overstate & smoothen profits since 2014.

  • At least 20 undisclosed related party suppliers are owned or managed by AAC CEO’s family members or employees.

  • These undisclosed related party suppliers are not listed in Apple’s supplier list, despite some claiming otherwise.

  • Some of the undisclosed related entities supply the same products as AAC does, are based in the same locations as AAC is, & hire employees under AAC’s name.

  • AAC has used these hidden entities to evade Apple’s labor standards specified in the Apple Supplier Code of Conduct.

  • Apple (and other parties) will conduct independent investigations, & validate our findings. As a result, AAC’s profit margins will decline, converging to its peers’ levels.

  • AAC is in violatio...

April 27, 2017

  • Gotham City Research was unable to verify that Dirk Markus holds a PHD from Harvard University;

  • in fact, we were unable to verify that Dirk Markus holds any degrees from Harvard.

  • How many shares does Aurelius’ management currently own? Why does Aurelius refuse to answer this simple question?

  • When asked about his current shareholdings last week, CEO Dirk Markus said: “I cannot say anything… we respect the law with regards to quiet periods” Is Dirk Markus telling the truth, implying that he is legally restricted?

  • Is Aurelius telling the truth when it claims “Steffen Schiefer has been CFO of AURELIUS since 2012"?

March 28, 2017

GOTHAM CITY RESEARCH’S OPINIONS:

  • Aurelius’ shares are worth no more than €8.56 per share, implying at least -88% downside to its current share price.

  • Aurelius may face similar scrutiny as Philip Green did in the UK, who was accused of systematically plundering BHS.

SUMMARY OF FINDINGS:

  • We were unable to reconcile 43% – 100%+ of Aurelius’s reported earnings to the sum of its subsidiaries’ earnings.

  • 2015 contingent liabilities, as calculated by the sum of its parts, seem understated by 46% or more.

  • Aurelius’ income from negative goodwill accounts for over 120% of 2011-2015 earnings.

  • Similarly high levels of negative goodwill preceded a permanent -95%+ collapse in the share price of Arques AG, whose business model seems identical to Aurelius’.

  • Aurelius claims to be a “good home for companies” yet nearly 60% of portfolio companies entered insolvency after Aurelius sold them, per our review.

  • Our estimate of NAV is 80%-90% lower than Aurelius’ unaudited...

April 29, 2016

GOTHAM CITY RESEARCH’S OPINIONS:

  • MDCA shares are worth less than $1.00 per share, implying 96%+ downside.

  • MDCA will restate several years’ historical results as a result of the issues covered in this report and elsewhere.

  • The on-going SEC investigation will lead to new revelations of wrong-doing.

SUMMARY OF FINDINGS:

  • 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.

  • Doner lost a key 16 year-old client account in Q4 2015.

  • 72andSunny was recently sued twice for copyright infringement. Crispin Porter Bogursky was similarly sued several years ago before CP+B’s fell from grace.

  • BDO and David Wiener & Co are quasi-captive entities MDCA used to s...

August 3, 2015

Did EIGI deliberately target customers who engage in malicious activities? Does EIGI aggressively attract customers from the internet underground?

Gotham City Research expects:

  • EIGI will ‘beat’ its Adjusted EBITDA estimates today (just as we expect university students to ‘ace’ self-graded exams). EIGI has generated negative free cash flow each quarter it has “beat” Adj. EBITDA estimates.

  • Endurance will aggressively dangle its vague $500 million Adjusted EBITDA long-term goal, hoping to fool some investors into thinking that the previously disclosed $500 million figure is new information, when in fact, the $500 million target is old news from several months ago.

Gotham City Research believes investors will gain a more accurate understanding of the company’s health and prospects, by asking the following questions (for more information, read the report):

1. Average Revenue per Subscriber (ARPS): What are the total number of end subscribers and resellers you had for each year between 2012 and 2014? How many currently? What % of your total revenues are sourced from resellers for those years?

2. Churn Rate: What is EIGI’s month...

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