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Aspen begins freefall as rumours circle

The South African company could potentially be the target of a new Viceroy report.

Aspen’s share price started to plummet on Tuesday as rumours in the market suggest it may be the next company to be scrutinised by Viceroy Research, a small firm operating from New York. This comes in the wake of a number of damning allegations made by Viceroy about Steinhoff last year. 

Aspen in free fall

Aspen lost almost 10% of its value by 1:15 pm on Tuesday, where it was trading at R236.20. Its slump began close to market open.

Viceroy has also promised, via social media platform Twitter, another report on a South African company in the new year:

Some of the team was recently, and may still be, visiting South Africa:

According to sources Moneyweb has spoken to, Aspen shares similar characteristics to that of Steinhoff, namely ongoing problems and investigations by regulators in various parts of the world, a serial acquirer, large amounts of debt and accounts that are not as transparent and easy to comprehend as some investors would like. 

Aspen reacted by publishing a Sens on Tuesday afternoon that stated the following:

MARKET SPECULATION ON VICEROY RESEARCH REPORT

Aspen has become aware that there is market speculation regarding a possible report into Aspen being undertaken by Viceroy Research, a research group which published an exposé on Steinhoff recently.
Aspen shareholders are advised that it has had no contact with Viceroy Research and, as such, is unable to confirm that this speculation is correct. Aspen furthermore advises that it is not aware of any information of a price sensitive nature that requires communication to shareholders and that trading in the current financial year has been consistent with the prospects communicated to shareholders in the 2017 financial year results announcement as published on SENS on 14 September 2017.

Moneyweb has been unable to confirm from Viceroy as to whether it will be publishing a report on Aspen. It is also unclear from its report on Steinhoff whether it engaged with management, and if it did, whether it engaged representing themselves as Viceroy. 

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Who is this Viceroy Research really?

Clearly, they send shivers down the spines of investors. It’s like seeing a ghost…

>> Viceroy is a US-based investment company that choses to maintain a low profile. It’s a team of three that ‘thinks differently’ and spends an inordinate amount of time looking into questionable accounting practices “that shouldn’t happen but often do”. They challenge anyone to poke holes in the report they have compiled on Steinhoff. All of the information is publically available – it just takes a team of forensic accountants to dig into the detail and join the dots, they say. <<

they're short sellers, talking their book

They do research on levels that your average fund manager does not do… When they find a bad apple, they build a short position and release the report.

https://viceroyresearch.files.wordpress.com/2017/12/steinhoff-article-viceroy2.pdf

While we all hope that Steinhoff will not be nearly as bad as the share price currently indicates………….so far looks like Viceroy pretty good.

If so then our “average” fund managers are distinctly below average.

Without more clarity, this statement from Aspen is worrisome: ““The more we can build on emerging market platforms, the more excited we are. To perform in Asia Pacific is going to be important for Aspen”. Could this be motivated by less stringent compliance requirements in Africa and other emerging markets whilst battling with compliance issues in the USA and Europe?

They are a company that does hack jobs on corporates, and occasionally they strike it lucky. Even with Steinhoff we are not yet sure what is accurate in the Viceroy report and what is fiction. Most reports they write disappear into the annuls of science fiction mumbo jumbo.

HS your comment is mumbo jumbo and smacks of ignorance to the malfeasance on the part of Steinhoff

Perhaps you best do some research yourself on yourself

What investigations in various parts of the world?

Viceroy, please have a look at Naspers and Sanlam.

Trader, stop spreading rumours to boost your hand. Naspers is 120% Tencent (there’s nothing material to Naspers share price that its accounting, it’s all about Tencent). And Sanlam pays out a dividends equal to cash operating profits and has too much cash – you cannot create cash through dodgy accounting. Worry about the insurers which only generate debt and promises. One of these had R6bn earnings in the last year but paid no tax in SA.

Viceroy please take a closer look at Ascendis Health. They make acquisitions in some obscure geographics where the regulatory systems are non existant. They invest in some thug infested territories. Some is not right inside that company

Viceroy may just be great at what they do. But to me theres something off. They are short sellers whose research can sway sentiment, sentiment (ie fear) has sway over price action.

Can we really call them objective when their research serves thier own (financial) interest?

Seems to me that the entire country is one big Ponzi scheme! What you see is what you DON’T get!

What a stupid statement robertinsydney – seems to me that your hate for all things South African has reached a peak with you now resorting to gross simplifications. Shame – must be terrible to live with such resentment!

A bit off-topic here, but.. heartfelt condolences? Really? I am sure that the loved ones of the crash victims find no comfort in the condolences of these anonymous ghosts. Why not create the wanted speculation and sensation by just straight out announcing you are in SA, rather than use a tragic event to achieve this? Because that is clearly what they were trying to achieve. Talk about questionable ethics.

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