Sept 9 (StartName) – British IT outsourcing firm Quindell Plc QPP.L said on Tuesday it had won a libel lawsuit against U.S.-based short-seller Gotham City Research LLP, which had raised questions about the company’s revenue model and profit quality.
Quindell, which initiated legal action against the short-seller in April, said that following the High Court ruling in London the process to evaluate damages due to the company would begin in November.
Shares of Quindell jumped 11.5 percent to 184 pence in early trading, one of the biggest rises on the London Stock Exchange.
The stock had lost 72 percent of its value since Gotham City published a report on its website in April.
“We are pleased that following the co-ordinated shorting attack led by Gotham and others, we have been able to successfully win judgement from the High Court in our claim for libel against Gotham,” Quindell Vice Chairman Tony Bowers said in a statement.
Short-sellers borrow stock and then sell it in expectation the price will fall, aiming to cover their position at a profit.
Gotham City published a similar report in July on Spanish wireless network provider Gowex GOW.MC, questioning its revenue reporting and the competence of its managers.
Gowex said a week later it would file for bankruptcy, after its chief executive said the company’s accounts for at least four years were unfaithful and that he was responsible for the misrepresentation.
(Reporting by Abhiram Nandakumar in Bangalore; Editing by Mark Potter)