Updated on Tuesday, November 10. (See below.)
Late last week a Twitter user brought to our attention that Globo plc, the enterprise mobility vendor, is embroiled in a financial scandal involving falsified revenue and profits. The CEO admitted to fraud and has resigned, and the company is now in administration (a legal status in the UK that’s similar to bankruptcy).
What does Globo do?
Globo was founded in 1997 in Greece, and today provides MDM, MAM, a mobile app development platform, development services, and several other legacy products.
Globo wasn’t well known in the US until recently. In 2014 they got added to the Gartner EMM Magic Quadrant, and they stayed this year even as a few other vendors were dropped. In 2014 Globo acquired two smaller US mobile companies, Notify and Sourcebits, and moved their headquarters to Palo Alto. They had a stated revenue of 106 million Euros.
I’ve seen demos of Globo’s products and met with them several times. I wrote in 2014 that their broad offering of EMM combined with an app development platform was an attractive strategy, and that they were an up and coming EMM vendor to watch.
What’s happening now?
Everything came to a head on October 22nd when a hedge fund called Quintessential Capital Management issued a report alleging that Globo was using shell companies to falsify profits and revenues. The report’s authors had trouble contacting legitimate distributors, and believe that at least 60% of Globo’s sales are fake. They also criticized the quality of Globo’s products. (You can read the full report here.) The hedge fund was shorting Globo’s stock.
Globo initially refuted the report, and then suspended trading of their shares (which were traded on the London Stock Exchange AIM market).
A succession of bad events followed, as documented by statements issued on Globo’s website. Globo’s CEO Costis Papadimitrakopoulos told the board about “certain matters regarding the falsification of data and the misrepresentation of the Company's financial situation” and resigned. He had also recently sold most of his stock. The company is under investigation in the UK, and most recently it was announced that it is going into court-ordered administration.
Of course this leaves a lot of employees that were working for Globo in good faith in a terrible situation, and our thoughts go out to them.
A Facebook group that says it represents product development, product management, and professional services employees at Globo issued a statement refuting the hedge fund’s criticism of their software.
I’ll update this story if I hear anything else.
Update: Tuesday, November 10, 2015
A former Globo employee informed me via email that Globo’s subsidiaries, Notify and SourceBits, are no longer being funded by Globos creditors; offices in Canfield OH, Pittsburgh PA, and Palo Alto have been closed; and employees are seeking unemployment benefits. Consequently, customers for GO!Enterprise MDM, GO!NotifySync, and GO!NotifyLink are without support.