# EIG Stock Investigation



## Nick_A (Apr 28, 2015)

> The independent research firm Gotham City Research is out with a new report Tuesday in which it says shares of Endurance International Group, a cloud solutions provider, are worth zero dollars.


http://www.businessinsider.com/gotham-city-research-on-endurance-international-2015-4


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## ChrisM (Apr 28, 2015)

Ouch


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## Nick_A (Apr 28, 2015)

In case anyone is unfamiliar with the giant EIG: http://www.webhostingchoose.com/business/all-endurance-international-web-hosting-brands/


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## QuadraNet_Adam (Apr 28, 2015)

Time for everyone to sell their stocks in EIG! http://www.nasdaq.com/symbol/eigi


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## DomainBop (Apr 28, 2015)

EIG's press release in response to the Gotham City Research report:



> "The claims in this 'report' are baseless and not rooted in reality. The reality is, since going public, Endurance has beat expectations every quarter, showing consistent growth throughout the company. Endurance senior executives still own a significant stake in the company and are deeply invested in its future success. To suggest otherwise, is ridiculous.
> 
> "Endurance is transparent in how it calculates all of its metrics including its average revenue per subscriber, subscriber counts, organic growth and monthly revenue retention. The company has always been clear in its financial disclosures and reports on its financial health and growth.  KPMG serves as Endurance's internal auditor including auditing Sarbanes-Oxley controls. BDO serves as the company's external auditor.
> 
> "As previously disclosed, the company's free cash flow for operations in 2014 was $143 million. Additionally, Warburg Pincus and Goldman Sachs own more than 40 percent of the company. Endurance has never interacted with Gotham City Research or the unnamed analyst who authored this report."



...and here come the vultures:



> Andrews & Springer LLC, a boutique securities class action law firm focused on representing shareholders nationwide, is investigating potential securities fraud claims against Endurance International Group Holdings Inc. (NASDAQ:EIGI) ("Endurance International" or the "Company"). ...On April 28, 2015, investment analyst firm Gotham City Research LLC ("Gotham City") released a report disclosing that 40%-100% of the Company's profits were suspect.


full press release: http://www.nasdaq.com/press-release/endurance-eigi-shareholder-alert--andrews--springer-llc-is-investigating-endurance-international-20150428-01182

+1 to that vulture law firm for its almost immediate "time for a class action" response to today's Gotham City research report <--sarcasm in that statement directed at the legal industry in general


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## MannDude (Apr 28, 2015)

Ouch: http://finance.yahoo.com/echarts?s=EIGI+Interactive#

Worth keeping an eye on


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## Francisco (Apr 28, 2015)

MannDude said:


> Ouch: http://finance.yahoo.com/echarts?s=EIGI+Interactive#
> 
> Worth keeping an eye on


Yikes.

EIG has always been an interesting one. There has been more than a few rumors of them paying way more than a brand is worth just because they *wanted* the brand. I get being excited for a brand but its supposedly happened multiple times now.

Francisco


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## TierNet (Apr 28, 2015)

Francisco said:


> Yikes.
> 
> 
> EIG has always been an interesting one. There has been more than a few rumors of them paying way more than a brand is worth just because they *wanted* the brand. I get being excited for a brand but its supposedly happened multiple times now.
> ...


Yeah, it was mentioned that EIG acquired Hostgator for $225 million dollars but the rumour has it that they paid far more than that to close the deal.


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## Francisco (Apr 28, 2015)

TierNet said:


> Yeah, it was mentioned that EIG acquired Hostgator for $225 million dollars but the rumour has it that they paid far more than that to close the deal.


The brand was valued at much much lower, like ~40M range, so if it went for 225M..... what the hell.

Francisco


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## raindog308 (Apr 28, 2015)




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## QuadraNet_Adam (Apr 28, 2015)

Endurance has responded:

"The claims in this 'report' are baseless and not rooted in reality. The reality is, since going public Endurance has beat expectations every quarter, showing consistent growth throughout the company. Endurance senior executives still own a significant stake in the company and are deeply invested in its future success. To suggest otherwise, is ridiculous.

Endurance is transparent in how it calculates all of its metrics including its average revenue per subscriber, subscriber counts, organic growth and monthly revenue retention. The company has always been clear in its financial disclosures and reports on its financial health and growth. KPMG serves as Endurance's internal auditor including auditing Sarbanes-Oxley controls. BDO serves as the company's external auditor.

As previously disclosed, the company's free cash flow for operations in 2014 was $143 million. Additionally, Warburg Pincus and Goldman Sachs own more than 40 percent of the company. Endurance has never interacted with Gotham City Research or the unnamed analyst who authored this report."


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## raindog308 (Apr 28, 2015)

Some of this is shameful scare mongering.  They host terrorist-related web sites!  OMG!  You mean they don't review every web page they host - what a shock.  It's not like the EIGI is inviting ISIS to its board meetings, or that it continues to host the sites once it becomes aware.  Some EIGI-hosted web sites have MALWARE!  I'm shocked.

But the interesting thing about this is that EIGI is a public company and as such, its reports are audited.  In this case, by BDO which is certainly a big-name, well-known firm.  Also, EIGI's CEO has to sign each public filing saying it's accurate, under penalty of perjury and Sarbanes-Oxley sanctions.

It's one thing for a consultancy or shareholder activist to say "these buffoons don't know what they're doing" - e.g., the giant powerpoint about Olive Garden that was published a few months ago.  But in that case, no one said the company's financials were deceitful (just that its strategy was poor).

Alleging fraud is a different matter.

On the other hand, what are we to think of a research company whose website has a wordpress favicon, whose 'about' page is a stream of insults, and who doesn't have an analyst signing his report (which is hosted on scribd)!?


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## KuJoe (Apr 28, 2015)

And don't forget that the "report" was published entirely for the author to profit off of like they have in the past. It's sickening that they do this and people circulate this filth without bothering to read it.


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## Coastercraze (Apr 28, 2015)

Am I the only one who thought of Batman?

Gotham City!


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## KuJoe (Apr 28, 2015)

Right from page 2 of that "report":



> You should assume that as of the publication date of this report, GOTHAM CITY RESEARCH LLC stands to profit in the event the issuer’s stock declines.


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## KMyers (Apr 29, 2015)

KuJoe said:


> Right from page 2 of that "report":
> 
> "You should assume that as of the publication date of this report, GOTHAM CITY RESEARCH LLC stands to profit in the event the issuer’s stock declines."


This is true and the stock prices are indeed declining.


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## William (Apr 29, 2015)

Reverse Pump'n'Dump with sale orders.


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## jarland (Apr 29, 2015)

KMyers said:


> This is true and the stock prices are indeed declining.


After the market opened today it's still higher than what I sold at. The stock remains at a good position. Yesterday's dip to around $16 was probably the most powerful impact that this report had, and it's rebounding. At this point (meaning soon after your post, not at the time of) it's simply not fair to say it's declining, now we're looking at the typical day to day fluctuations of the stock market ($1-$2 from before the report). Yesterday's impact seems to be largely over with.


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## drmike (Apr 30, 2015)

I missed this thread with the forum bug / filtered view.  I oddly wondered why everyone was chatting to me about this topic yesterday or day before.... derp.

Here's the deal and this is just my opinion.

Gotham, what they do shouldn't be legal.  They take financial positions in companies while mass shit talking and pushing agenda to mess with the stock value.   They are shorting the stock.  It's price manipulation and hostility with intended purpose of profiteering.

Since April 1, roughly, EIG's stock has had crazy high volume.   Current daily shares traded in past 50 days is over 1 million.  Other day they hit 20-odd million shares in one day.   Back at April 1st, the 50 day share transaction average was 800k~.

800k --> 1 million+  ---> 20+ million in one day.  

Problem is this month wasn't one or two peaking days, there have been a bunch.

What else?  May 5th, next Tuesday is Q1 earnings report.

I have zero love for EIG.  Cooked books?  Sure, they are ablaze like others out there.  Fraud on the accounting sheets though?  It's possible.   What more likely is background deals, nested movement of money from interests they own, etc. Financial analysis of plain view isn't going to be easy with these folks and their breadth of experience hiding and manufacturing money.

Look at who owns EIG shares.  90% institutional.  Warburg Pincus and Goldman Slacks are the two big holders.  Something like 16 million shares sold by them and other big holders vs. 16k purchased in whatever reporting period I gleaned the other day.   They are divesting of shares.  So is senior management.

The multiple dollar drop this week suddenly... That's sheer emotional response to the hype this "report" has generated.   Again, it's stock manipulation.  These clowns aren't transparent.... Show me your position.  Push your share records to public Gotham.  Never will happen.


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## HN-Matt (May 2, 2015)

drmike said:


> Gotham, what they do shouldn't be legal.  They take financial positions in companies while mass shit talking and pushing agenda to mess with the stock value.   They are shorting the stock.  It's price manipulation and hostility with intended purpose of profiteering.


Isn't 'the manipulation of value' how all competitive media functions in a sense? Unsure what is so shocking about shamelessly applying political spin to the stock market tbh. Seems like par for the course in modern capitalism.


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