Quindell chairman Robert Terry has launched a scathing attack on short-sellers as he vowed to buy more shares of the insurance outsourcer after being hit by a damning piece of research.
Quindell stock has fallen almost 230 per cent since its highs in April after US-based Gotham City Research, which admits to taking short positions in companies it covers, said Quindell was “built on sand” and its shares were worth only 3p.
Quindell has denied all the allegations and is taking legal action.
Despite announcing first-half profits have trebled to £153.7 million in the first six months of the year and revenue rose 119 per cent to £357.3 million, Quindell shares today fell a further 8 per cent, 17p, to 193.25p.
Terry blamed the fall on short-selling activity, saying the slip was “certainly not a reaction to the results”. He added: “Once I’m able to, if the price stays at this level I’ll be buying more [Quindell shares].”
Quindell handles outsourced claims from insurers such as Aviva and Direct Line and also has legal processing and medical diagnostic businesses.
In addition to the accusations from Gotham, the company was this week hit by an accusation of fraud by a financial blogger.
Quindell has denied the charges and Terry said both attacks were “purely commercial”, saying: “Clearly someone’s making money shorting the stock.” The company is taking legal action against the blogger, while Terry said progress on the Gotham case was due “within days”.
Last month there were reports that its relationship with joint-venture partner RAC was on the rocks. Quindell teamed up with the roadside rescue firm to install black boxes that monitor driving in its customers’ cars, a field known as telematics. Terry said relations with RAC remain strong.
Quindell today named Stefan Leon Borson, the former boss of Redbus Media, as its new head of legal. But Terry denied this was a defensive move, saying: “We’re the largest global publicly listed law firm. We employ about 1500 legal professionals. Adding one more is not a response to Gotham.”