Monday, December 30, 2013

Citron Research on Textura: Citron issues report alleging fraud, collusion and deception committed by certain officers and directors of Textura

“Wow!” That’s what you’re going to say after your read the revealing article that Citron Research put out on Textura.  I think one thing is for certain.  And, that is …. either Textron is going to force Citron to retract its report, or Textron’s stock is going to plunge far below its initial IPO price.  I’m betting on the latter.  The gents at Citron have gone way out on the limb on this one, and, after reading the full report, I do think that the limb Citron’s climbed out on is as sturdy as the base of a redwood tree. 

On Friday, November 22nd, I put up a post on Repro 101 about Textura, and, in that post, I said this:

Textura’s sales did increased from $6.319 mil to $10.533 (Sep 30 2012 to Sep 30 2013) – an increase of around $4.2 mil, but if that’s something for the company (or analysts) to crow about, I’m as mystified as I normally am.  Especially since approximately $1.5 mil of that sales growth came from revenues acquired when Textura purchased PlanSwift.  Keep in mind that, at yesterday’s market close, Textura’s market cap was $883 mil.  And, also keep in mind that between the time Textura went public in June and now, Textura did, at a few points, have a market cap exceeding $1 billion.

Uh, that’s correct.  To me, this sort of valuation for a company that, in my mind, is growing slowly and whose losses are growing, not slowing, is ridiculous.  But, that just shows you how well I understand the stock market.

This past week, I saw both “The Wolf of Wall Street” (Joel’s rating, “way over the top”, but definitely worth seeing if you enjoy movies about con artists and scams) and “American Hustle” (Joel’s rating, “outstanding movie”, superb performances by the entire acting ensemble)

Citron titled its article, “American Hustle” meets “The Wolf of Wall Street”

Citron Exposes the Fraud, Collusion, and Deception that brought Textura (NYSE:TXTR) to Wall Street

For anyone who is disgusted with the abuses of Wall Street — this story is for you.  True value of the stock is less than $4 a share … AT BEST.

Wall Street has been sold on Textura Corp. (NYSE:TXTR) as a hot enterprise software company, rapidly consolidating the construction industry with a purported “SaaS” platform.  Sound good? 

The gap between fiction and reality couldn’t be any wider.   Equity bubble for enterprise software SaaS stocks?  Sure, but this one is so much worse…..  

Jim Chanos is fond of defining the potential for short candidates as "Fads, Frauds, and Failures".   It’s rare that you find all three in one package.  
Citron encourages all readers to scrutinize the supporting links and decide for yourself.

Link to full expose (report) that was posted on Citron’s web-site:

From, December 26th, 2013…..

Textura Corp. (TXTR), a seller of online invoicing and other services to the construction industry, tumbled 17 percent after Citron Research alleged the company’s initial public offering relied on fraudulent tactics. The shares fell to $31.30 at the close in New York, marking a record one-day decline. Before today, the stock had climbed 152 percent since its IPO in June. 

Citron Research, a stock commentary site, posted a report saying the company would have been insolvent if not for the IPO and that it misled the U.S. Securities and Exchange Commission about the health of the business.

Textura has amassed $180 million in losses over the past 10 years and its finances are getting worse, according to Citron, which said the stock is worth less than $4.

After the shares plunged today, Textura released a statement disputing the allegations.

Link to article on Bloomberg:

And the vultures circle …..

By now, at least three “shareholders’ rights” law firms have issued press releases stating that they are going to be investigating Textron’s activities:

Pomerantz Grossman Hufford Dahlstrom & Gross LLP is investigating claims on behalf of investors of Textura Corporation ("Textura" or the "Company") (NYSE: TXTR). Such investors are advised to contact Robert S. Willoughby at or 888-476-6529, ext. 237.
The investigation concerns whether Textura and certain of its officers and/or directors have violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. On Thursday December 26, 2013, a report from Citron Research stated, among other things, that the Company's stock is worth less than $4 per share due escalating expenses by the company which demonstrate a lack of leverage and unsustainable business model. Moreover, Citron concluded that the company refusal to provide disclosure of data supporting retention rates and revenue generated from related party referrals, strongly suggest non-arm's length transactions.

Levi & Korsinsky is investigating Textura Corporation ("Textura" or the "Company") (NYSE:TXTR) for possible violations of federal securities laws.
Click here to learn more about the investigation: or call: 877-363-5972. There is no cost or obligation to you.
On December 26, 2013, Citron Research issued a report alleging fraud, collusion and deception committed by certain officers and directors of the Company during its IPO and filings with the Securities and Exchange Commission. In reaction to the report, shares of Textura dropped $6.44, or 17%, to close at $31.30. The investigation concerns whether Textura and certain of its officers and/or directors have violated federal securities laws.

Shareholder rights law firm Johnson & Weaver, LLP has commenced an investigation into whether certain officers and directors of Textura Corporation (NYSE: TXTR) violated state or federal laws.
In December 2013, Citron Research issued a report titled "'American Hustle' meets the 'Wolf of Wall Street'". In this article Citron stated that Textura would have been insolvent had it not been for this IPO and listed a myriad of examples of how investors were misled.

Textura Responds to Misleading Report

CHICAGO, Dec. 26, 2013 /PRNewswire/ --  Textura Corporation (NYSE: TXTR), has learned that a report was posted today alleging that fraud, collusion and deception were involved in the initial public offering of Textura (TXTR) and its filings with the Securities and Exchange Commission. Textura finds this report to include a variety of inaccurate and misleading statements and gross distortions. Textura completely rejects any allegation of fraud, collusion or deception in Textura's IPO or SEC (SCUR) filings. Textura encourages investors to rely on Textura's filings with the SEC as providing accurate information regarding the company and its performance, and not to rely on reports which may have purposes other than giving investors accurate information and impartial analysis.

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