Boston, MA 12/19/2013 (wallstreetpr) – Amtrust Financial Services, Inc. (NASDAQ:AFSI) is a New York-headquartered insurance company. This week the company has been at pains to defend itself from claims that its accounting practice and business operations are not appropriate.
A report authored last week by research firm GeoInvesting sought to warn investors that they needed to be aware of some irregularities in the company’s trading data. The report claims that Amtrust Financial Services, Inc. (NASDAQ:AFSI) is routinely hiding losses to project itself as a healthy company when indeed there are serious underlying problems.
The insurer is now up in arms against the report and is accusing its authors of blatantly trying to manipulate its stock price. Usually when investors believe bearish reports, they tend to sell their positions in a manner that result in the stock shedding its value quickly than it would otherwise do. And this is what is annoying AFSI.
The company’s Chief Executive Officer Barry Zyskind has issued a scathing attack on the bearish report and sought to assure investors that there was no cause for alarm.
So who can investors believe in this environment? It is sometimes complex to deal with such accusations and counter-accusations. However, looking at the manner in which Amtrust Financial Services, Inc. (NASDAQ:AFSI) is trying to defend itself, there could be a few teething problems in the company’s business, but not necessarily the magnitude portrayed by the GeoInvesting report.
You find that CEO Zyskind agrees that indeed his company has never been at a better position before. He is doing this to show investors that there is a lot of room for the company’s growth. But this statement can also be taken to mean that the insurer is not in good position as the report tried to allude to.
Amtrust Financial Services, Inc. (NASDAQ:AFSI) revealed that from the beginning of 2009 to the first nine months of 2013, it earned approximately $1.1 billion in pre-tax profits. About $25 million of the profit resulted from operations in the heavily criticized Luxembourg business.
