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  "documentTitle": "IQE plc (IQE)",
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  "authorName": "Carson Block",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2018-02-08 00:00:00",
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  "notes": "The slide uses financial statement excerpts to highlight the lack of economic substance in transactions between IQE and CSC.",
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      "text": "IQE sells to CSC at purportedly arms-length / market valuations (e.g., PP&E transferred at 4.6x estimated carrying value), but IQE buys from CSC at non arms-length / market prices - at cash cost, with no profit margin or reimbursement for depreciation and amortization",
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      "text": "IQE was CSC's only revenue source through 2016; IQE sells to CSC at purportedly arms-length valuations, but buys from CSC at non arms-length prices; CSC employees appear to believe they are IQE employees; shared address/phone; IQE exercises control.",
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      "text": "gross margin: -105.9%",
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      "text": "Through 2016, IQE was CSC's only revenue source:",
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      "text": "We believe IQE dominates CSC, supporting our view that the transactions between them lack substance largely because:",
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      "kind": "paragraph",
      "text": "During the year the Company made sales of £3,955,000 (2015: £1,521,000), other recharges of £4,877,000 (2015: £nil) and sold plant and machinery of £898,000 (2015: £nil) to IQE plc group companies.",
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      "text": "2 In 2016, CSC's revenues were £3.955 million and COS were £8.143 million. 3 CSC AR, pp. 32 and 13.",
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      "text": "Income statement table showing Turnover, Cost of sales, Gross loss, Operating loss, and Loss for the financial year for 2016 and 2015.",
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      "text": "Compound Semiconductor Centre Limited",
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      "text": "Statement of comprehensive income for the year ended 31 December 2016",
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