Shares in cybersecurity firm Darktrace
fell as much as 7% in Tuesday London trading after short seller Quintessential Capital Management put out a report explaining its newly disclosed short position.
The New York City-based hedge fund outlined skepticism about the “validity of Darktrace’s financial statements” and concerns of the company’s links to former executives of software firm Autonomy Mike Lynch and Sushovan Hussain.
Quintessential recently published a report into Cassava Sciences
which led to regulatory and criminal investigations by U.S. federal departments. The hedge fund was also named as a defendant in a defamation lawsuit launched by Cassava.
Read: Short sellers hit back at Cassava lawsuit against them: ‘We stand behind everything we wrote’
Darktrace has been at the receiving end of short seller criticism before. Last January, London-based Shadowfall placed a bet against the firm, according to The Telegraph.
Darktrace listed on the London Stock Exchange in April 2021 with an IPO price of 250p ($3.08). On Tuesday, the stock was trading almost 7% down at 205.20p.
Darktrace did not immediately respond to MarketWatch’s request for comment.