Sunday morning Telegraph:
Telecoms group Let’s Gowex is today due to publish a rebuttal to a report by controversial investment research firm Gotham City Research which sent shares in the Spanish business crashing.
Gotham City released a paper last Tuesday alleging that 90pc of revenues at Let’s Gowex, which provides free public wi-fi, did not exist and put a zero price target on the company’s shares.
Shares in Madrid-listed Let’s Gowex fell 60pc in two days after the report was released, wiping €870m (£690m) from the company’s market value.
Two days later Spanish regulators said they were suspending trading in the shares until the company produced a detailed response to Gotham City’s claims, which Let’s Gowex management say are “unfounded and defamatory”.
Over the weekend Let’s Gowex said it had hired PricewaterhouseCoopers to carry out an audit of its accounting, financial, contractual and management data, the finding of which will be produced by the end of August.
Sunday afternoon Forbes:
Mass indignation as you can see. How dare these short sellers try to make a profit from writing a report about the company?
And then we get to the news on the wire today:
Genaro García Martín, Gowex president and founder, has resigned after admitting that the last four years accounts “do not reflect the true picture.”
The firm is going straight into bankruptcy. So those wireless smart cities (New York and Madrid, initially) will have to wait.
It turns out that Gotham was right all along. It really was a fraud.