“Wow!” That’s what you’re going to say after your read the revealing article that
Citron Research put out on Textura. I
think one thing is for certain. And,
that is …. either Textron is going to force Citron to retract its report, or
Textron’s stock is going to plunge far below its initial IPO price. I’m betting on the latter. The gents at Citron have gone way out on the
limb on this one, and, after reading the full report, I do think that the limb
Citron’s climbed out on is as sturdy as the base of a redwood tree.
On Friday, November 22nd, I put up
a post on Repro 101 about Textura, and, in that post, I said this:
Textura’s
sales did increased from $6.319 mil to $10.533 (Sep 30 2012 to Sep 30 2013) –
an increase of around $4.2 mil, but if
that’s something for the company (or analysts) to crow about, I’m as mystified
as I normally am. Especially since approximately $1.5 mil of that
sales growth came from revenues acquired when Textura purchased
PlanSwift. Keep in mind that, at yesterday’s market close, Textura’s
market cap was $883 mil. And, also keep in mind that between the time
Textura went public in June and now, Textura did, at a few points, have a
market cap exceeding $1 billion.
Uh, that’s correct. To me,
this sort of valuation for a company that, in my mind, is growing slowly and
whose losses are growing, not slowing, is ridiculous. But, that just shows you how
well I understand the stock market.
This past week, I saw both “The Wolf of Wall
Street” (Joel’s
rating, “way over the top”, but definitely worth seeing if you enjoy movies
about con artists and scams) and
“American Hustle” (Joel’s rating, “outstanding movie”, superb performances
by the entire acting ensemble)
Citron titled its article, “American Hustle”
meets “The Wolf of Wall Street”
Citron Exposes the Fraud, Collusion, and Deception that
brought Textura (NYSE:TXTR) to Wall Street
For anyone who is disgusted with the
abuses of Wall Street — this story is for you. True value of the stock is
less than $4 a share … AT BEST.
Wall Street has
been sold on Textura Corp. (NYSE:TXTR) as a hot enterprise software company,
rapidly consolidating the construction industry with a purported “SaaS”
platform. Sound good?
The gap between
fiction and reality couldn’t be any wider. Equity bubble for
enterprise software SaaS stocks? Sure, but this one is so much
worse…..
Jim Chanos is
fond of defining the potential for short candidates as “Fads, Frauds,
and Failures”. It’s rare that you find all three in one
package.
Citron
encourages all readers to scrutinize the supporting links and decide for
yourself.
Link to full expose (report) that was posted on Citron’s web-site:
From Bloomberg.com, December 26th,
2013…..
Textura Corp. (TXTR), a seller of online invoicing and
other services to the construction industry, tumbled 17
percent after Citron Research alleged the company’s initial public offering
relied on fraudulent tactics. The shares fell to $31.30 at the close in New
York, marking a record one-day decline. Before today, the stock had climbed 152
percent since its IPO in June.
Citron Research, a stock commentary
site, posted a report saying the
company would have been insolvent if not for the IPO and that it misled the
U.S. Securities and Exchange Commission about the health of the business.
Textura has
amassed $180 million in losses over the past 10 years and its finances are
getting worse, according to Citron, which said the stock is worth less than $4.
After the shares
plunged today, Textura released a statement disputing the allegations.
Link to article on
Bloomberg:
And the vultures circle …..
By now, at
least three “shareholders’ rights” law firms have issued press releases stating
that they are going to be investigating Textron’s activities:
Pomerantz Grossman Hufford Dahlstrom
& Gross LLP is investigating claims on behalf of investors of Textura
Corporation (“Textura”
or the “Company”) (NYSE: TXTR). Such investors are advised to contact
Robert S. Willoughby at rswilloughby@pomlaw.com
or 888-476-6529, ext. 237.
The
investigation concerns whether Textura and certain of its officers and/or
directors have violated Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934. On Thursday December 26, 2013, a report from Citron Research stated,
among other things, that the Company’s stock is worth less than $4 per share
due escalating expenses by the company which demonstrate a lack of leverage and
unsustainable business model. Moreover, Citron concluded that the company refusal
to provide disclosure of data supporting retention rates and revenue generated
from related party referrals, strongly suggest non-arm’s length transactions.
Levi & Korsinsky is
investigating Textura Corporation (“Textura” or the
“Company”) (NYSE:TXTR) for possible violations of federal securities
laws.
On December 26,
2013, Citron Research issued a report alleging fraud, collusion and deception
committed by certain officers and directors of the Company during its IPO and
filings with the Securities and Exchange Commission. In reaction to the report,
shares of Textura dropped $6.44, or 17%, to close at $31.30. The investigation
concerns whether Textura and certain of its officers and/or directors have
violated federal securities laws.
Shareholder rights law firm Johnson & Weaver, LLP has commenced an
investigation into whether certain officers and directors of Textura Corporation
(NYSE: TXTR) violated state or federal laws.
In December
2013, Citron Research issued a report titled “‘American Hustle’ meets the
‘Wolf of Wall Street’”. In this article Citron stated that Textura would
have been insolvent had it not been for this IPO and listed a myriad of
examples of how investors were misled.
Textura
Responds to Misleading Report
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CHICAGO, Dec.
26, 2013 /PRNewswire/ — Textura Corporation (NYSE: TXTR), has
learned that a report was posted today alleging that fraud, collusion and
deception were involved in the initial public offering of Textura (TXTR) and its filings with the Securities and Exchange
Commission. Textura finds this report to include a variety of inaccurate and
misleading statements and gross distortions. Textura completely rejects any
allegation of fraud, collusion or deception in Textura’s IPO or SEC (SCUR) filings. Textura encourages investors to rely on
Textura’s filings with the SEC as providing accurate information regarding the
company and its performance, and not to rely on reports which may have purposes
other than giving investors accurate information and impartial analysis.
Reprographics 101 