Quindell has received some much needed support from M&G, a prominent investment fund management company, following a short selling attack on the claims handler that saw 50% of its stock market value wiped off in one day.
Tom Dobell, manager of the £7 billion M&G Recovery + investment fund, told Citywire that he was still backing Quindell after Gotham City Research, a US-based investment research firm had called Quindell's profits "suspect" and claimed that its shares were only worth 3p each. The report prompted what Quindell suspects to be a co-ordinated short selling raid on 22 April which saw the company's share valuation drop from almost 40p to nearly 20p at one point.
Despite the severe drop in value, Dobell, who had 2.3% of the Recovery fund invested in Quindell last month, dismissed Gotham’s report as ‘a rather unpleasant anonymous bear raid’ based on ‘spurious information’.
‘This business has a very interesting proposition in terms of making the industry a lot more effective for everybody,’ Dobell told Citywire.
He also said that Quindell also had a "fascinating position" in the roll out of telematics for a mass market of drivers.
"We supported the company enthusiastically and continue to do so," he said. "We have a thick skin here but we are working with them and I intend to try to help make this company a great success."
Meanwhile, Quindell's own directors have been buying shares to try and reassure investors.
On 29 April, Quindell announced yesterday that founder and chairman Rob Terry had bought 500,000 shares at 19p, costing him £95,000 and that Tony Bowers, its vice-chairman, had purchased 131,579 at a cost of £25,000.