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Dobell: why I stand by Quindell despite ‘unpleasant bear raid’
by Robert St George on Apr 29, 2014 at 11:25
Dobell (pictured) acquired an 8% stake in the insurance software specialist in November, but last week its share price plunged 40% after Gotham City Research published a note describing it as ‘built on quicksand’.
Dobell dismissed Gotham’s report as ‘a rather unpleasant anonymous bear raid’ based on ‘spurious information’, while acknowledging that ‘some of it had some legitimacy’.
Quindell has initiated legal action against what it termed a ‘coordinated shorting attack’. The firm accounted for 2.3% of the M&G Recovery fund at the end of March.
‘It is obviously going through some growing pains at the moment,’ commented Dobell.
‘It is in transition. We are working closely with the company and its advisers. So far they are responding very well and they have a particularly hard-working, capable chief executive.’
Dobell also lamented what he regarded as a tendency in the UK to revel in the problems of entrepreneurs. ‘We love to build them up and smash them down,’ he remarked.
For Dobell, Quindell nevertheless remains a compelling investment given its focus on simplifying the processing of insurance claims.
‘This business has a very interesting proposition in terms of making the industry a lot more effective for everybody.’ Dobell added that Quindell also contained a ‘really interesting’ division in Canada, and a ‘fascinating position’ in the roll out of risk-assessing black boxes for cars.
‘For a combination of those reasons, we supported the company enthusiastically and continue to do so,’ he concluded.
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