Has this business got more skeletons in its closet than Tim Burton has featured on screen in his film and TV repertoire? Yet another hedge fund would think so, judging by the latest bear raid on the cybersecurity group.
A year since ShadowFall had a pop at the business, along came another damning criticism of Darktrace earlier this week from Quintessential Capital Management which has raised questions about the group’s accounts.
AJ Bell’s Russ Mould said: “Naturally this has resulted in share price weakness in recent days, and it’s enough for Darktrace to launch a £75 million share buyback programme.
“This sends a message to the market that Darktrace’s management clearly thinks the shares are too cheap. It also reinforces the message transmitted earlier this week that the business doesn’t think it has done anything wrong, saying it has ‘full confidence’ in its accounting practice.
“However, the fact we’ve had two damning reports means a lot of investors will have lost faith in the business. A buyback might provide short-term relief to the share price but ultimately Darktrace needs to come up with some detailed responses to Quintessential’s accusations or investors are simply going to walk away.”