Why Ebix Shares Rebounded
Feb 26th 2013 4:28PM
Updated Feb 26th 2013 4:55PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Ebix have rebounded by as much as 14%, following the company's 26% plunge just days ago, after the company defended itself from the recent short attack.
So what: The stock was crushed on Thursday following a research report from Gotham City Research alleging accounting improprieties, which was also posted on Seeking Alpha. Ebix attended an analyst conference call hosted by Craig-Hallum Capital Group this morning to defend itself, where CEO Robin Raina and CFO Robert Kerris defended the company's books.
Now what: A transcript of the call is not available at this time, but the call was open to the general public. Ebix did reiterate in a press release that the company's accounting is appropriate and within SEC reporting requirements, including its accounting of intercompany loans which were a part of Gotham's allegations. Ebix said it is looking into legal recourse against what are seemingly "malicious, irresponsible, and self-serving blog posts." Gotham did disclose in its report that it would benefit should shares decline, so "self-serving" does seem apt.
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The article Why Ebix Shares Rebounded originally appeared on Fool.com.Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool recommends Ebix. The Motley Fool owns shares of Ebix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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