April 28, 2015


  • EIGI shares will go to $0.00 per share, as the company will struggle to service its debt. Normalized EBITDA margins do not cover interest expense.

  • Recent years’ reported EBITDA benefited from attracting Blinkx-like revenue (spam/malware, terrorism, etc.).

  • EIG profits at the expense of its customers (service outages, poor customer service, etc.).


  • 40%-100%+ of EIGI’s reported profits are suspect.

  • 2014 Average Revenue per Subscriber (ARPS) actually declined -13%. EIGI’s 10K claims ARPS grew +11%.

  • Organic growth overstated ~3x. We calculate organic growth to be ~5.6%, not 13.0%-15.0% as EIG claims.

  • Directi’s revenues per the Indian filings are 30%-67% lower than reported in EIGI’s 10K.

  • Directi revenue figures within the EIGI 10K do not add up.

  • EIGI paid 17% of its ’12-’14 EBITDA to a related party tied to the CEO. The related party seems to be Endurance.

  • No international revenue disclosure...

Gotham City Research initiates coverage on Let’s Gowex SA, with a price target of € 0.00/share (100% downside)


  • Gowex shares are worth €0.00 per share.

  • Over 90% of Gowex’s reported revenues do not exist. We estimate GOW’s actual revenues to be <€10 million.

  • The shares will be suspended, just as Pescanova’s shares were suspended.


  • Gowex’s actual Wireless revenues are at most 10% of what GOW reports in its financial statements.

  • GOW’s Hotspot network it owns or manages is ~5K in size. CEO told us 100K+ & JBCapitalMarkets estimates 35K.

  • GOW’s audit fee is €40,000, which makes sense if Gowex’s actual revenues are only 5%-10% of reported revenue.

  • 90% of Telecom revenue originated from undisclosed related parties, tied to GOW CFO & an early investor. We have evidence Gowex’s largest customer was really itself.

  • Gowex Telecom (i.e. Iber-x) website has not been updated in years. It appears to be no longer in business.

  • ...

April 22, 2014

Gotham City Research initiates coverage on Quindell PLC, with a price target of 3p/share (92% downside)


  • 42%-80% of Quindell’s profits are suspect, as we are unable to reconcile the whole with the sum of the parts.

  • Quindell was little more than a country club until 2008/2009, yet QPP somehow began reporting Microsoft/Google-esque profit margins in 2010/2011.

  • 26%-43% of Quindell’s 2009 and 2010 revenues came from Clickus4.com, a subsidiary owned by CEO Robert Terry.

  • 41% of Quindell’s 2011 revenues came from an undisclosed related party (controlled by a QPP executive).

  • 10+ acquisitions lack economic substance. Several of the acquired companies are little more than paper companies.

  • QPP’s largest telematics customer is itself (via subsidiaries Himex & Ingenie), accounting for 61% of 2013 revenue.

  • 99% & 80% of Himex’s 2012 and 2013 balance sheets are seriously deficient (Himex is QPP’s largest acquisition).

  • Former executives allege Himex/Navseeker...

February 18, 2014

Gotham City Research initiates coverage on Blucora, Inc (a.k.a. Infospace).

“Google’s first step is easy: Fire InfoSpace (a.k.a. Blucora). Google doesn’t need InfoSpace, and there’s zero reason for this relationship to continue in light of InfoSpace’s repeated failings.”

– Harvard Business School Professor Benjamin Edelman, author of The Darker Side of Blinkx, and the “Doogie Howser of online investigative work” according to former federal prosecutor Richard Boscovich


  • +60% of BCOR’s revenue will evaporate in coming quarters, as Google realizes it is better off without BCOR. Google and Yahoo can walk away from Blucora any time.

  • At least 50% of BCOR’s traffic is derived from malware, click fraud, illicit traffic (e.g. child pornography), and otherwise suspect traffic.

  • Blucora and its partners’ practices will receive scrutiny from Google, advertisers, FTC, DOJ, FBI, IRS, &/or the SEC.

  • BCOR shares are worth no more than $5.00/share, and <$1.00...

November 14, 2013

Gotham City Research initiates coverage on Tile Shop Holdings, Inc.  Summary of Gotham City Research’s findings:

  • Tile Shop’s 2013 LTM earnings are overstated by over 200%. TTS’s actual 2013 LTM EPS is closer to $0.18/share.

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

  • The company has used its China-based undisclosed related party and improper accounting to overstate profits.

  • Gross margins will continue to decline through 2014, as TTS must reverse prior years’ accounting overstatements.

  • Tile Shop’s shares are worth no more than $1.54-$3.34/share, implying 84%-93% downside.

  • TTS’s creditors will likely restrict additional indebtedness & capital expenditures until TTS’s accounting is corrected.

Summary of the Bases of Opinions:

  • TTS’s largest supplier, Beijing Pingxiu, is an undisclosed related company, and accounts for 20-30+% of TTS’s COGs.

  • Beijing Pingxiu is secretly controlled by Fumitake Nishi...

September 19, 2013

Based on new information we’ve obtained, Gotham City Research believes:

  • Ebix improperly financed $100+ million of acquisitions and stock buybacks, tax free, under the guise of a bogus intercompany asset sale, between Singapore & India.

  • Ebix Inc. & its subsidiaries’ filings are materially incorrect. Newly identified accounting irregularities, in sum, exceed 42% of Ebix’s market capitalization ($169+ million in irregularities).

  • Swedish pre-tax income is less than %1 of the amounts claimed in the SEC filings, according to Swedish filings.

  • BDO Sweden was unable to confirm that any of the dealings between Ebix’s Swedish subsidiary, Ebix Singapore and Ebix Australia, ever actually occurred.

  • Ebix meets the requirements for an “Event of Default”, per Article VII (c) of the Credit Agreement.

  • Current shareholders are likely to recover little to no value, once the USA & Ebix’s creditors enforce their rightful claims.

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