Mystery share warning sinks Spanish Wi-Fi firm

Spanish market authorities have halted trading in Let's Gowex, the Spanish Wi-Fi provider which has lost over $1 billion in market value in just two days after a mystery report said shares in the company were worthless.

Mystery share warning sinks Spanish Wi-Fi firm
File photo: Tele2AB/Flickr

Spain’s National Stock Exchange Commission (CNMV) decided on Thursday morning to paralyse transactions involving the company while it investigates the circumstances of the run on its shares, according to Spanish newspaper El País.

The crisis for Gowex began earlier this week after the publication of a report by Gotham City Research, a shady analysis firm which some reports have linked to market short sellers.

In any case, the 93-page report suggested that the technology company’s shares, which began Tuesday selling at around €20 each (approximately $27), were actually worthless.

The report suggested that Gowex was another Pescanova, in reference to the Spanish seafood-processing company which went bankrupt just over a year ago and was shown to have obtained credit for nonexistent business activity.

The CNMV has requested information from London and New York stock market authorities on the activities and credentials of Gotham City research, El País reports.

The Spanish market watchdog will also be analysing “in detail” deals involving Gowex shares over recent sessions to check whether “operations in breach of market rules” have taken place.

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