5 things you absolutely need for the MBA convention in Las Vegas

Is the Massachusetts AG's run for governor compromised by GSE buyback lawsuit?

Nonprofit CEO also co-chairs Coakley’s campaign finance committee

Exclusive: Move CEO Steve Berkowitz opens up about News Corp deal

Plus his thoughts on Zillow/Trulia and the future of real estate
W S

REwired

new REwired blog header
Opinion, commentary and analysis on everything that makes the U.S. housing economy tick -- not to mention the ghosts in the machine, too. Written by HW's team of editors and reporters each business day.
Investments

Altisource operations compared to Hitler's inner circle on YouTube

Is this really necessary?

March 21, 2014
/ Print / Reprints /
| Share More
/ Text Size+

Only with the power of social media does an activist shareholder get to use a seriously dramatic film about the final days of the Third Reich as valid comparison of their perception of conflicts of interest at Ocwen Financial (OCN), and related affiliates.

Whether or not it's an appropriate decision is obviously anyone's call. But the disclaimer at the end of the video, posted two days on YouTube and a parody of German film "Downfall," makes the position of activist shareholder Glaucus Research clear.

"This video is satire," states the text at the end. "Hopefully, that is obvious."

But is it really necessary? Or appropriate even?

Glaucus is clearly making an absurd point with the video. Perhaps they forgot the original origins of the film, why it was made, and the deep meaning it brought to the legions of filmgoers, myself included, who can appreciate the power of art to highlight what is perhaps the darkest tragedy of modern humankind.

Or maybe it was more, like, "Hitler parody for Ocwen, like, OMG, LMAO," over there at Glaucus.

Glaucus is hoping the video will highlight their position on Ocwen affiliates, Altisource Residential Corporation (buy strong and long) (RESI) and Altisource Asset Management (sell short) (AAMC).

The accompanying research report serves as backup for the seemingly contradictory investment positions, by dishing up a healthy helping of corporate malfeasance aimed at those in charge of the above companies.

Take this entry under a section, titled "A Clear Conflict of Interest"

RESI does not have its own executives. Rather, AAMC’s management team serves in a dual role as both asset managers and executives of RESI, even though they owe no fiduciary duty to RESI’s shareholders. Furthermore, AAMC’s Incentive Fee is calculated by an opaque methodology and is therefore difficult to model (evidenced by the fact that Wall St. consensus estimates underestimated it by 454% in Q4 2013), giving AAMC significant discretion in calculating its own paycheck. Because AAMC’s executive team today owns far more equity in AAMC than RESI, AAMC’s management team is financially incentivized to generate large asset management fees at the expense of RESI’s shareholders.

The above text indicates exposure to legal action on behalf of shareholders.

That is a serious claim. But when backed up with such a trite parody video, Glaucus runs the risk of their point, which they regard so dearly in the disclaimer, of being washed-out.

Comments powered by Disqus