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We believe $GSX is lying about the balance in their @Citibank “long-term investment” account. Reviewing quarterly reports, 20-F & investor call transcripts we have identified *material discrepancies* in the purported values. We have found 6 issues. https://www.deloittefraud.com/fake-investments
$GSX has faked revenue, & this has resulted in them reporting cash balances higher than actually exist. GSX claims to invested fake cash into wealth management products called ‘long-term investments.’ In Q1 they claimed to have $198.2 of cash & LTI w/ @Citibank. We call bullshit.
Issue 1) On $GSX quarterly reports they show the value of long-term investments greater than purchase price (unrealized gain) but on investor calls they repeatedly said they have mark-to-market losses. They say notes price lower at first. Why conflicting values? We account for FX
Issue 2) They claim value is $150M on investor call but that doesn’t match quarterly report. Off by several million dollars. Did CFO get confused?
Issue 3) Same month as showing mark-to-market losses they claim to redeem part of note at par. How’s that possible?
Issue 3) Same month as showing mark-to-market losses they claim to redeem part of note at par. How’s that possible?
Issue 4) $GSX relies on third party valuations of this wealth management product. Why? @Citibank provides a mark-to-market value. We believe $GSX is using 3rd party as scheme to dupe auditors. This is similar to @wirecard lying about cash balances.
Issue 5) In one call CFO says partial redemption was in April, another it’s say May. Another error in a long line of attempting to keep lies straight.
Issue 6) GSX invests a disproportionate amount of “cash” into long-term investments. ~50% vs <5% for $TAL and zero for $EDU
Issue 6) GSX invests a disproportionate amount of “cash” into long-term investments. ~50% vs <5% for $TAL and zero for $EDU
Can some of these errors be explained away? Maybe. All liars try to do that. There are enough red flags before this to require retroactive cash audit but all of these concerns should make it URGENT for auditor to confirm directly with @Citibank and look at all dates/flows. $GSX
Feel free to review my analysis on the structured notes. I already accounted for FX rates and only used dates I could match with balance sheet. Regardless of analysis, values on quarterly report don’t match with that CFO is saying on quarterly calls. $GSX
I encourage others to dig deeper. If you have access to Bloomberg you can try to figure out which notes $GSX is claiming to own. They refuse to answer my emails. Feel free to comment - I’ll update my analysis if I’m wrong. They are lying about cash - let’s find errors!!
