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Blue Sky Plunges After Short Seller Glaucus Questions Fund

Updated on
  • Glaucus values Blue Sky’s shares at A$2.66 at the most
  • Blue Sky said report has a number of factual inaccuracies

Trading of Blue Sky Alternative Investments Ltd. shares have been halted after short-seller Glaucus Research Group questioned the company’s assets under management in a report.

Shares dropped as much as 16 percent to A$9.61 before the halt, the most since August 2016, after Glaucus said Wednesday it had a short position in the Brisbane-based fund manager and valued the stock at A$2.66 at most. Glaucus alleged that Blue Sky’s fee-earning assets under management were an estimated 63 percent less than the reported figure, according to the report.

“There are a large number of factual inaccuracies throughout, including the assertions raised in relation to how Blue Sky calculates and reports its fee-earning assets under management, its investment performance and its fees,” Blue Sky said in a statement after the market closed. Shares will remain halted until it provides a response to the issues raised the the report, the statement said.

This is the second time that Glaucus has targeted a company listed in Australia. The research firm in March 2017 issued a critical report on TFS, which was then renamed Quintis. Shares in the sandalwood producer fell about 80 percent before being suspended from trading last May. The company confirmed the appointment of KordaMentha as administrators in January.

Here’s a list of Blue Sky’s largest shareholders

Before today, the shares had risen more than 1,100 percent since Blue Sky went public in Jan. 2012. The stock closed at A$11.43 on Tuesday.

— With assistance by Tim Smith

(Updates story to add Blue Sky’s comment in the third paragraph.)
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