Anonymous Analytics Comes to the Aid of a Rival's Short Selling Target

  • Researcher defends Criteo after Gotham’s negative reports
  • Anonymous Analytics had opposed Gotham’s short thesis on AAC

Criteo SA, which has been targeted by short-seller Gotham City Research, has a rival research firm coming to its defense.

Anonymous Analytics, a research provider which doesn’t disclose its identity and has in the past issued negative reports on Chinese companies, gave Criteo a strong buy recommendation on Thursday. It said Gotham’s bearish research on the advertising technology firm was “highly flawed and misleading” and that the stock could rally 36 percent from its last official close. 

The U.S. depositary receipts of Paris-based Criteo are up about 11 percent in New York since Gotham first questioned the company’s ad-click information on Sept. 15. They fell as much as 3.7 percent in early U.S. trading on Thursday, before paring losses to a decline of 1.8 percent.

This is the second time that Anonymous Analytics has defended a company targeted by Gotham, which earlier this year questioned Apple Inc. supplier AAC Technologies Holdings Inc.’s profit margins. Anonymous Analytics said it called multiple Criteo clients and industry experts to better understand the industry as well as learn if there had been any fallout from Gotham’s reports.

“Not a single client or industry insider we reached out to actually cared about the reports,” Anonymous Analytics wrote in a 21-page report on its website. “To believe Gotham City Research’s short thesis is to believe that they know more than the sophisticated customers that actually use – and are directly plugged into – Criteo’s service.”

Daniel Yu, the New York-based founder of Gotham, didn’t immediately respond to requests for comments. Criteo, who has previously said Gotham’s report includes “a number of false claims” and represents a “fundamental lack of understanding” of the company’s business and technology, also didn’t immediately respond.

AAC was Gotham’s first target in Asia after a string of successful short campaigns in developed markets. Shares in AAC fell about 10 percent on May 11, the day Gotham’s preview report was published. The stock has since reversed losses and has gained about 67 percent since Anonymous Analytics’s report on June 6, which called AAC a “reputable, blue chip name with perhaps some of the best shareholder-friendly corporate governance practices among all Hong Kong listed stocks.”

While Anonymous Analytics said it doesn’t hold any positions in Criteo securities, the researcher disclosed that some “research and due diligence contacts, consultants, affiliates, and/or clients may have a long position in the stock or debt of Criteo and/or options of the stock.”

Anonymous Analytics has in the past cited government pressure on critical researchers in China for its analysts’ decision to keep their identities secret. The researcher in September 2014 published a critical report on Tianhe Chemicals Group Ltd., whose shares are currently suspended in Hong Kong trading. Shares in recent target Chong Sing Holdings FinTech Group Ltd., which was previously known as Credit China FinTech Holdings Ltd., have risen 37 percent in Hong Kong since Anonymous Analytics first questioned the company’s valuation and investments. The company has said the allegations are groundless and contain various misrepresentations.

— With assistance by Joshua Fineman

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