Seeking Alpha

LKQ defends itself against short-seller's report predicting 70% drop

  • LKQ Corp. (LKQ), which fell nearly 9% yesterday after Prescience Point Research said it exaggerated revenue growth, today said the short seller's report contained "numerous inaccuracies."
  • Prescience Point said profits at LKQ have been amplified by acquisitions and the company faces declining demand for its auto parts.
  • LKQ says management stands behind the company but the company is now in a blackout period until financial results are issued in late February.
  • Investors should buy LKQ shares after the decline, Stifel Nicolaus says, citing management's “best in class” practices.
Comments (4)
  • Why did this report that was released at 8 am this morning takes all day to post after the close. $LKQ also stated "Although our fourth quarter and year end 2013 financial results are scheduled to be released in late February 2014, we are confirming today that we expect to report results within the ranges of the 2013 guidance issued on October 31, 2013, except that we anticipate cash flow provided from operations to exceed guidance."
    16 Jan, 08:56 PM Reply Like
  • Of course LKQ management is going to justify their stance; their statements about inaccuracies are meaningless.

     

    I was skeptical about Prescience, since they've only produced six reports to date. However, I read about half of the 120 page document (which is available for free, no doubt because they expect to reap profits from a short position).

     

    I found that they tried hard to paint a negative light on pretty much everything, right down to standard business practices that everyone executes. However, hidden amongst the inflammatory language, I personally found there to be a great deal of very useful information. I'd recommend giving it a read, and judge for yourself.
    19 Jan, 02:45 AM Reply Like
  • This is bunk, and these Prescient Point losers are a joke. I downloaded the report. Typos, other errors, and general misdirection. Every time they post a report a stock goes down enough for them to make some money and then returns to pre-BS report levels. Seeking Alpha, you should be ashamed of yourself for even reporting this crap from these shysters, looking to scrape a few bucks off of home gamers. Look at their bios-if they could have been real investors, running hedge funds, they would have.
    19 Jan, 03:16 AM Reply Like
  • I'm not seeing stocks bounce back every time. Looking at the past 6 reports:

     

    FLTX report Sept 19, 2013: Down ~25% since report.
    INWK report April 30, 2013: Down ~45% since report.
    BDBD reports Feb 26, 2013 and Mar 15: Up ~25% since report
    ACTV report Oct 2012 and Feb 2013: Company has been sold, (I'm not going to investigate to establish fair sale value per share).
    UAMY report Sept 2012: Down ~33% since report.
    STB report July 2012: Down ~12% since report.

     

    I'm not going to bother digging back further for myself, just wanted to do a quick check on the claim of stocks bouncing back every time. My take is "Far from it".

     

    20 Jan, 04:01 PM Reply Like
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