TheMotorcycleBoy wrote:PS Like many here, I'm out of BUR. Just reviewing existing investments and my future criteria, to try to minimise the chance of this kind of thing happening to me again.
To be clear, nothing that has "happened" is because the CFO is not a trained accountant. No-one is saying that the IFRS standards used by the company have not been used according to the rules. It's just that the rules allow the company to book profit based on their estimate of the value of open legal cases. All that has "happened" is that many people (me included) did not do their research properly and were unaware of, or ignored, information which was already in the public domain.
Nothing in the Muddy Waters dossier should have come as a surprise to anyone, as they only used information available to all to make their case. All in all, it wasn't a particularly strong case but it was enough to call into question how to value the shares of Burford Capital. I thought I had a decent handle on that but when there's no operating cashflow and the EPS and NAV is open to interpretation, how do you value such a company? I have no idea, so I sold.
All the best, Si