It’s a real worry for Boohoo’s investors if the hedge fund attacking its share price is right about alleged accounting funnies. In a lengthy research note published this week, Shadow Fall, the London-based short-seller, essentially made two main claims: first, it argued that Boohoo was making its Pretty Little Thing subsidiary brand look more profitable than it really is by failing to allocate costs appropriately; second, that the company had been misleading investors about the level of its free cashflow for the past six years.
Assessing free cashflow is a measure used by some analysts to value companies, although it should be said not by the analysts that tend to cover Boohoo’s stock. The leading online fast-fashion retailer published a rebuttal yesterday, insisting that
