Corner of Berkshire & Fairfax Message Board

General Category => Investment Ideas => Topic started by: Lupo Lupus on May 04, 2018, 02:00:37 PM

Title: FFGRP - Folli Follie
Post by: Lupo Lupus on May 04, 2018, 02:00:37 PM

Quintessential Capital Management (who uncovered the Globo fraud) have taken a shot at Folli Follie:

Essentially, they claim that POS are much lower than stated, and hence sales likely to be overstated significantly. This may explain why the company is cash-flow negative since many years despite good reported earnings.

The company has replied to the allegations:

They do not seem to have a good reply on the POS overstatement, but on some other allegations (eg that webtraffic should be measured using Chinese websites and not facebook and the likes).

I followed Folli Follie for some time but did ultimately not invest because of several red flags (negative cash flow, ballooning working capital, small auditor) even though it was ultra-cheap (on reported metrics).

Anybody following this? Seems to become a very interesting story!

Title: Re: FFGRP - Folli Follie
Post by: MrB on May 07, 2018, 03:58:33 AM
Same here; passed on a few red flags, mainly tied to the China business.
Title: Re: FFGRP - Folli Follie
Post by: mcliu on September 28, 2018, 08:32:42 AM
Saw this on FT today, incredible stuff..

Folli Follie: $1bn of fake sales, and what to learn from the debacle