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UPDATE - Quindell shares halve on blog accusations

Published: 10:15 22 Apr 2014 EDT

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--ADDS COMPANY REACTION--

Quindell (LON:QPP) has threathened legal action aginst a blog that called up to 80% of the insurance outsourcer’s profits “suspect” and sparked a 50% slump in its share price.

The note called ‘Quindell PLC: A Country Club Built On Quicksand’, was published by Gotham City Research, which in a lengthy disclaimer said it was not registered as an investment adviser and that it “stands to profit in the event the issuer’s stock declines”.

The share slump prompted Quindell into a quick response in which it slammed the accusations and threatened action.

“The board rejects the assertions raised in this note and considers the note to be highly defamatory, deliberately misrepresentative and entirely rejects the conclusions that are made,” it said in a stock exchange statement.

It said it is consulting its legal advisers on what action to take and is reporting co-ordinated shorting activity to the authorities.

It repeated its latest full-year figures, which showed the company to be in rude financial health.

A research note on EBIX caused a similar reaction in June last year, sending the Nasdaq-listed stock down more than 50%. Its shares are yet to recover to the levels seen prior to the note.

Quindell’s own company website crashed as worried shareholders flooded to the site for more information.

The shares crashed to below 20p at one point before recovering to 29.5p, a fall of 24%.

 

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