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Fraud!http://www.citronresearch.com/index.php/2011/11/01/citron-reports-on-qihoo-360-nasdaqqihu/I cannot believe I didn't come across this stock before. Even if the company wasn't a fraud, this valuation is truly astounding. Why does this company have a 2 billion dollar market cap? WHY? WHY? WHY?????????????I know that most investors don't have any common sense, but come on! The company had 58 million in revenues last year, why on Gods all mighty earth would investors be willing to pay 2 billion for it? Even the 58 million is probably not true considering the company is a massive fraud. I must be living in some kind of alternate reality where paying more than 100 times what something is worth is smart investing.I just know one thing for sure. Idiots who make investment decisions such as this will make me very rich. Because the intelligent investor knows that common sense, above all else, is the most important thing in investing.
Citron has just published another article on why this company is a fraud. Click on the link bellow to read it.
http://www.citronresearch.com/index.php/2011/11/15/citron-stands-corrected-is-qihu-more-like-ccme/
What's the usual catalyst for exposing this kind of fraud?
dwKapital, a lot of times the auditor resigning is the catalyst. When the auditor resigns, it is generally because they found fraud, but unfortunately they do not share that information with the investors.
At that point, some companies just go dark (stop reporting anything to investors) and are delisted. Other times they keep filing with the SEC and try to find a new auditor, and the board may form a committee to investigate the allegations.
Qihoo is obviously a real business, but the numbers they report don't add up to me and management is extremely shady.