Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!


Endurance (BlueHost, JustHost, HostGator, HostMonster) called out as fraud, stock price crashes 28%
New on LowEndTalk? Please Register and read our Community Rules.

Endurance (BlueHost, JustHost, HostGator, HostMonster) called out as fraud, stock price crashes 28%

rm_rm_ Member

Gotham City Research said that 40%-100% of Endurance International Group Holdings, Inc.’s profits were suspect. Gotham City said the company had overstated its organic growth by 3x, its domains hosted 1,000s of spam and malware-related sites, it hosted terrorist websites “as recently as a few weeks ago” Gotham says that the firm has an undisclosed subsidiary, had lied to the government about its credentials, and it was free cash flow negative.

Now this is interesting to watch, also these Gotham guys have a straightforward way of going about things, i.e. tell it like it is, I like that :D

Thanked by 1Jonchun
«1

Comments

  • "Gotham City Research" sounds weird. Do they work for Batman or for the Joker?

    -

  • JonchunJonchun Member, Provider
    edited April 2015

    Was gonna make a thread about this, but I knew some people here would say I'm "bashing EIG." (facepalm) Thanks for the share!

    40%-100%+ of EIGI’s reported profits are suspect.

    Ouch!

    And the entire Ravichandran family is in on it... Lol.

    @rds100 said:
    "Gotham City Research" sounds weird. Do they work for Batman or for the Joker?

    Definitely Batman.

  • jarjar Provider
    edited April 2015

    Sounds like an interesting read, hard to know if it's legit without doing so, but as a former stock holder... it's still higher right now than what I sold at. This fluctuation in price isn't that insane on a one year graph. Granted, with Forbes and Business Insider throwing in the towel on this, it could be a rough year for them to say the least. Tomorrow may tell more about how it lands. Traders are easier to scare than they were in 2007, and in general this is a market they don't typically understand well.

    Thanked by 1netomx

    "Note that Romania has laws agains all the illegal activities just like US, including copyright. Is not the Dracula's country or no man's land as you thought." - Random email from someone I don't know, about nothing I've done or said

  • To be honest, I don't think that EIG is worth zero. It is true that they grow by acquiring other webhosts (e.g. Arvixe recently) but they are really good at upselling various services to the consumers with some good margins. That's one of the reasons you see the Client Area of the majority of brands looks similar.

  • @Jar - sounds like you got out in a nick of time then :) But I think this suspicion has been long known.

    Thanked by 1jar
  • this is what happens when you challenge NSA.

    Thanked by 1ricardo
  • JonchunJonchun Member, Provider

    @heachhog said:
    To be honest, I don't think that EIG is worth zero. It is true that they grow by acquiring other webhosts (e.g. Arvixe recently) but they are really good at upselling various services to the consumers with some good margins. That's one of the reasons you see the Client Area of the majority of brands looks similar.

    Well that's the thing. The report says that they're not actually really that good as we thought they were. The customers they do get are attributed to the following:

  • Seriously2015Seriously2015 Member
    edited April 2015

    I read EIG, yet I think there are other company names that could be there. I'm sure noone here hosts spam sites or overstates there growth or staff (1099 is not an employee) or earnings.

  • 4n0nx4n0nx Member

    Their pages always looked to me like scam sites. ^.^

    (((o(゚▽゚)o))) If privacy is outlawed, only outlaws will have privacy. (((o(゚▽゚)o)))

    ヽ(`Д´)ノ Everyone should run Tor on their idle servers.

  • heachhogheachhog Member
    edited April 2015

    @Jonchun said:


    Not defending EIG here but, IMHO, GoDaddy and EIG have a bit different focus with EIG targeting established shared hosts while GoDaddy being primarily a registrar with a hosting business. EIG does burn a lot cash from the investors but if they still bite, then why not :)

  • JonchunJonchun Member, Provider

    @heachhog said:

    Touche in terms of sales. Maybe hosting needs more marketing than domain registrations. However, you would think that a hosting-focused business would spend more than 3% of revenue on tech/infrastructure...

  • WilliamWilliam Member, Provider

    Eh, for webhosting 3% is not really bad, considering its just a bunch of cheap L5520 servers running cpanel with their own theme on top...

  • JonchunJonchun Member, Provider
    edited April 2015

    @William said:
    Eh, for webhosting 3% is not really bad, considering its just a bunch of cheap L5520 servers running cpanel with their own theme on top...

    I guess. I was under the assumption that most EIG hosts upsold to VPS/Dedis as well, which would be a tad more expensive than the stuff you're describing. I'm still reading the report so I'll see if there's any real details on it.

  • just for info resellerclub, hostnine are also part of that group

  • @William said:
    Eh, for webhosting 3% is not really bad, considering its just a bunch of cheap L5520 servers running cpanel with their own theme on top...

    EIG use their own control panel vDeck for most their brands. Personally saw it coming, at first I did think it was fake but they are mentioned in the one UK newspaper and it's a LLC. Not that I can find out if it's legit registered but someone near them could check the records.

    Blesta.Store - Blesta specialists
    Atlanical - Social Network Management

  • Honestly EIG probably have half of the support crew based in India...I've called GD a few times and always got to someone who speak US (Texas if I have to guess) English.

  • spammy said: I've called GD a few times and always got to someone who speak US (Texas if I have to guess) English.

    Their headquarters are based out of Phoenix, AZ if I recall correctly.

    QuadraNet - Cloud, Dedicated Servers & Colocation in Los Angeles, Dallas, Chicago, Miami, Atlanta, Chicago, and New JerseyNEW LOS ANGELES CENTURY DATACENTER - New Facility Means Great Deals! My Skype is: QuadraNet.Adam

  • creepcreep Member

    what do you guys think about the world economy today?

    You're so tight, baby.

  • Endurance has responded:

    "The claims in this 'report' are baseless and not rooted in reality. The reality is, since going public Endurance has beat expectations every quarter, showing consistent growth throughout the company. Endurance senior executives still own a significant stake in the company and are deeply invested in its future success. To suggest otherwise, is ridiculous.

    Endurance is transparent in how it calculates all of its metrics including its average revenue per subscriber, subscriber counts, organic growth and monthly revenue retention. The company has always been clear in its financial disclosures and reports on its financial health and growth. KPMG serves as Endurance's internal auditor including auditing Sarbanes-Oxley controls. BDO serves as the company's external auditor.

    As previously disclosed, the company's free cash flow for operations in 2014 was $143 million. Additionally, Warburg Pincus and Goldman Sachs own more than 40 percent of the company. Endurance has never interacted with Gotham City Research or the unnamed analyst who authored this report."

    QuadraNet - Cloud, Dedicated Servers & Colocation in Los Angeles, Dallas, Chicago, Miami, Atlanta, Chicago, and New JerseyNEW LOS ANGELES CENTURY DATACENTER - New Facility Means Great Deals! My Skype is: QuadraNet.Adam

  • GoDaddy has call centers in Iowa and Arizona

  • I am no paladin of EIG, but read EIG response to Report by Gotham City Research.

    EIG is shady in many aspects, and there are reasons to dislike their practices, but the original post looks like attempt to blame them in every popular hosting sin, just out of despise/whatever.

    However, if even some of those statements are true and EIG will suffer losses due to that, I won't shed a single tear.

    Monitor your network assets with IPHost (contact me to obtain a discount code)
  • this is what happens when you challenge NSA.

    Yeah, that was my first thought, they've obviously pissed off the wrong people.

  • KuJoeKuJoe Member, Provider

    It's sad that EIG got mixed up in this BS and people don't bother reading before they impact the lives of people.

    A quote from page two of the "report":

    You should assume that as of the publication date of this report, GOTHAM CITY RESEARCH LLC stands to profit in the event the issuer’s stock declines.

    Thanked by 3jar gsrdgrdghd Infinity
    -Joe @ SecureDragon - LEB's Powered by Wyvern in FL, CO, CA, IL, NJ, GA, OR, TX, and AZ
    Need backup space? Check out BackupDragon
  • Didn't Gotham do the same thing to Quindell sometime ago and Quindell issued legal proceedings against them? Possibly last year.

  • jarjar Provider
    edited April 2015

    KuJoe said: It's sad that EIG got mixed up in this BS and people don't bother reading before they impact the lives of people.

    Aye, further research into this reveals it to look quite a bit like someone's personal vendetta and/or an attempt at shady gains by a competitor. I mean, it doesn't impact me either way anymore, but if people are foaming at the mouth to see people I know struggle to put food on the table, that's just sad. CEO's may pile up cash, but the good people working their asses off at the bottom that are the first to go when a company tanks, people just like to pretend those aren't casualties of the things they try to do.

    Thanked by 2Infinity aglodek

    "Note that Romania has laws agains all the illegal activities just like US, including copyright. Is not the Dracula's country or no man's land as you thought." - Random email from someone I don't know, about nothing I've done or said

  • Its a scheme they have tried 4 times before. Eigi is up huge over past 12 months so they are shorting it and bad mouthing it but its failing. Its ony down 9 percent now. You could have made a killing buying after report came out

  • KuJoeKuJoe Member, Provider

    @Jar said:
    Aye, further research into this reveals it to look quite a bit like someone's personal vendetta and/or an attempt at shady gains by a competitor. I mean, it doesn't impact me either way anymore, but if people are foaming at the mouth to see people I know struggle to put food on the table, that's just sad. CEO's may pile up cash, but the good people working their asses off at the bottom that are the first to go when a company tanks, people just like to pretend those aren't casualties of the things they try to do.

    Gotham City LLC is a "company" that profits off short selling stocks so this attack was purely for money and nothing else. They probably made a fortune off this BS report and people are circulating it around the internet which, like you said, will only impact the people working paycheck to paycheck instead of the executives.

    Thanked by 1jar
    -Joe @ SecureDragon - LEB's Powered by Wyvern in FL, CO, CA, IL, NJ, GA, OR, TX, and AZ
    Need backup space? Check out BackupDragon
  • rm_rm_ Member
    edited April 2015

    Seriously2015 said: Its a scheme they have tried 4 times before. Eigi is up huge over past 12 months so they are shorting it and bad mouthing it but its failing. Its ony down 9 percent now. You could have made a killing buying after report came out

    Yeah this is just what they do. Except that it's not just unsubstantiated badmouthing, they released their findings in a completely public 61-page report that you are free to read and make your own conclusions. It's a fair game and they don't try to conceal that "GOTHAM CITY RESEARCH LLC stands to profit in the event the issuer’s stock declines."

    I for one am delighted that this stuff is [or seems to be] legal, or at least that they can stay anonymous and still do it.

    Seriously2015 said: Its a scheme they have tried 4 times before.

    Yes they make a living by calling out scams: http://www.businessinsider.com/lets-gowex-insolvent-after-gotham-report-2014-7?IR=T
    That's an amazing job and entirely fitting for their chosen name, I'd say.

    Thanked by 1Jonchun
  • cfgguycfgguy Member, Provider
    edited April 2015

    10% fall in shares is not big considering the stock price at 23-24 USD

    Thanked by 1jar

    KGR

  • Seriously2015Seriously2015 Member
    edited April 2015

    23 for marketing 3 for tech for every 100 in revenue. Sounds profitable to me. Doesnt matter if its more than godaddy. It still makes money. And if you believe gotham then you accept 2 acct firms were in on a fraud or just stupid. So pump and dump firm vs regulated audit reports? I go with the audit reports.

    Thanked by 1jar
Sign In or Register to comment.