{
  "docId": "019dd923-622c-750b-8b96-a79a828f1e2b",
  "docSlug": "be28a8f1faf0",
  "documentTitle": "IQE plc (IQE)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson Block",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2018-02-08 00:00:00",
  "orientation": "portrait",
  "aspectRatio": 0.77272725,
  "pageNumber": 3,
  "pageCount": 17,
  "prevPage": 2,
  "nextPage": 4,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "sparse",
  "nDataPoints": 0,
  "notes": "This is a text-heavy research note page focusing on forensic accounting allegations.",
  "elementsJson": [
    "paragraph"
  ],
  "metadataConfidence": 0.9,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b96-a79a828f1e2b/3",
  "deckHref": "/decks/019dd923-622c-750b-8b96-a79a828f1e2b",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b96-a79a828f1e2b.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b96-a79a828f1e2b#slide-3",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "We feel that IQE dominates CSC, and CSC is therefore likely an alter ego for IQE.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-2b61-7647-86f5-dd23324125c2",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.065,
        "w": 0.764,
        "x": 0.118,
        "y": 0.082
      },
      "kind": "paragraph",
      "text": "We identify five previously unknown issues with the accounting for transactions between IQE and CSC. Time and again, IQE seems to be employing “having one’s cake and eating it too” accounting. We feel that IQE dominates CSC, and CSC is therefore likely an alter ego for IQE.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "5e00ba06-0991-47c1-a4b6-29eacda4cf30",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.115,
        "w": 0.764,
        "x": 0.118,
        "y": 0.153
      },
      "kind": "paragraph",
      "text": "We believe IQE began aggressively capitalizing expenses in 1H 2017. CSC’s funds were largely exhausted by the end of 2016, and we suspect IQE was desperate for some more earnings magic. We note that insiders, who presciently purchased a substantial number of shares just before the JVs’ accounting benefits began flowing to IQE, sold millions of pounds of stock around the end of 1H 2017. These sales could be a sign that IQE’s ability to generate profits has hit the wall as the result of the exhaustion of its financial engineering options.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "c94970f3-c056-4c4d-9ccd-1e76d3f2443b",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [],
  "arcBeats": [
    {
      "to": 14,
      "from": 3,
      "beatId": "0ac51eb6-3b46-48a0-9d94-74187bdd07e4",
      "arcName": "Overcoming the Monster",
      "arcSlug": "overcoming-monster",
      "beatName": "Expose Contradiction",
      "beatSlug": null,
      "evidence": "The report highlights several contradictions and issues with IQE's accounting practices.",
      "position": 0,
      "confidence": 0.8,
      "parentBeatName": null,
      "parentBeatSlug": null
    }
  ],
  "loops": [
    {
      "to": 9,
      "from": 3,
      "name": "Aha Moment",
      "slug": "03-aha-moment",
      "bestFor": "Data-heavy sections, research findings, analytical arguments",
      "matchId": "0febe2a6-c98d-43cf-9c83-9221d1db1f76",
      "evidence": "The report presents several accounting issues that cast doubt on the substance of gains from transactions with CSC.",
      "position": 0,
      "objective": "What are the accounting issues with IQE's transactions with CSC?",
      "structure": "The Problem/Question -> What the Data Shows -> The Insight",
      "confidence": 0.8,
      "description": "Establish a tension, present data, then deliver the insight that changes everything"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}