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Darktrace launches buyback after bear raid

by LLB Reporter
1st Feb 23 11:55 am

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 groupโ€™s accounts.

AJ Bell’s Russ Mould said:ย โ€œNaturally this has resulted in share price weakness in recent days, and itโ€™s enough for Darktrace to launchย aย ยฃ75 million share buyback programme.

โ€œThis sendsย aย message to the market that Darktraceโ€™s management clearly thinks the shares are too cheap. It also reinforces the message transmitted earlier this week that the business doesnโ€™t think it has done anything wrong, saying it has โ€˜full confidenceโ€™ in its accounting practice.

โ€œHowever, the fact weโ€™ve had two damning reports meansย aย lot of investors will have lost faith in the business.ย Aย buyback might provide short-term relief to the share price but ultimately Darktrace needs to come up with some detailed responses to Quintessentialโ€™s accusations or investors are simply going to walk away.โ€

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