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CGI Group falls as hedge fund manager takes short position

Financial Post – Shares of CGI Group Inc , the parent of CGI Federal – the main contractor behind the glitch-plagued Healthcare.gov – slid on Wednesday after prominent short-seller Jim Chanos placed a major short position, citing among various reasons its “PR mess” with the rollout of the Affordable Care Act Exchanges.

CGI Group’s U.S.-listed stock dropped as much as 5.9 percent after Newsweek first reported early Wednesday that Chanos counts the stock among his “largest short positions.” The stock was down 3.8 percent at $34.81 in afternoon trading.

A 10-page memo Chanos sent recently to clients and obtained by Reuters outlines the reasons that Chanos believes CGI’s corporate performance and stock price warrant heavy scrutiny.

In the memo, Chanos cited the “PR mess with the rollout of the Affordable Care Act Exchanges, which could reduce the likelihood of future government contracts” and CGI’s “growing through acquisitions hides deteriorating fundamentals.”

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