Q: Defi down 15% of mgmt finding "trade irregularities"??....is this a big red flag...or good mgmt to ID & correct any problems identified??....have position....thanks, jb
5i Research Answer:
It is a flag, but only further investigation will reveal if the flag is red. Essentially, it found a mismatch between reported share ownership and relevant share depositories, such as CDS. This could be a simple error, or could mean some stock manipulation or false reporting. But this does not automatically mean it was the company that did anything wrong. It could be brokers, traders, hedge funds or other parties. But it does need to be clarified. Management specifically tasked agents to look into this, so that was a good move at least. We do not know all details here, but it does not 'look' so serious based on what we know so far.