EBIX - Why Ebix Stock Just Got Destroyed
Shares of Ebix (NASDAQ: EBIX) , a software provider serving the insurance, financial, healthcare, and e-learning industries, are getting crushed in Monday trading after the company reported disconcerting news over the weekend.
As the company revealed Friday night, after close of trading for last week, its auditor RSM US LLP has resigned as a "result of being unable, despite repeated inquiries, to obtain sufficient appropriate audit evidence that would allow it to evaluate the business purpose of significant unusual transactions [in Ebix's Indian gift card business] that occurred in the fourth quarter of 2020."
The business in question, part of EbixCash, has been a huge growth driver for Ebix, showing 95% sequential growth in the third quarter of 2020 for example. Now, investors are calling the reality of that growth into question, and Ebix stock is down nearly 50% as of 10 a.m. EST Monday.
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Why Ebix Stock Just Got Destroyed