Research Report Still Has Polygon Reeling

Jun 11 2014 | 9:54am ET

Polygon Investment Partners was mad last month over a research report attacking one of its largest investments, and it’s even madder now.

Polygon’s 11-month winning streak was snapped in April, after Gotham City Research called Quindell Portfolio “a country club built on quicksand” whose shares are worth no more than £0.03. The firm distributed its report to a number of hedge funds, sending Qundell shares plummeting.

Those losses extended into last month, sending Polygon down 1.39% and cutting its year-to-date gains to 8.69%.

“One of our underperforming strategies during the month was Quindell PLC, which traded down 17%, still reacting, we believe, to the publication of the Gotham report in April.” The hedge fund previously attacked that report as “highly sensationalized” and little more than a “dossier rehashing QPP’s historical red flags” that neglects “to mention any of what we feel are strongly mitigating factors such as the valuation and high-quality new business contracts.”

Polygon also dismissed Gotham City as a firm that has “been in business for less than two years and provide[s] little transparency about themselves.”

Polygon isn’t the only hedge fund fuming about the Gotham City report: In April, Algebris Investments accused the firm of insider-trading and market manipulation, filing complaints with both U.S. and British regulators.

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