Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Seek share price on watch as management responds to short attack

We examine the broad strokes of Blue Orca Capital’s short report against Seek, as well as the company’s just-released response.

Seek share price on watch as management responds to short attack Source: Bloomberg

Blue Orca’s Seek short

The share price of prominent Australian and international employment marketplace company Seek Group (ASX: SEK) is likely to be closely watched – and scrutinised – by investors in the days and weeks ahead following the release of an explosive short report from Blue Orca Capital last week.

As part of that report, Blue Orca alleges, among other things, that Seek’s Chinese business Zhhaopin is inundated with fake resumes and users, that the company is propped up by debt, and that investors have wildly ‘mispriced’ Seek.

‘Zhaopin is the foundation of Seek’s share price and, going forward, its ability to service its increasingly toxic levels of debt,' argued Blue Orca in its report.

‘Rather than valuing Seek as a fast-growing online recruiting platform, we value Seek for what it is — a slow or no-growth platform whose core business is shrinking and which carries a dangerous amount of debt,’ Blue Orca said in its report.

Blue Orca values Seek at $7.20 per share – implying potential downside of ~66% from the stock’s price at the close of Friday, October 30, 2020.

Management responds, stock slides further

Seek hit back at Blue Orca’s allegations today describing them as ‘unsubstantiated’, while saying:

'We believe the goal of the Report is to use speculative assertions to generate adverse publicity and then draw SEEK into public debate, which is consistent with the usual practice of short-seller firms.'

The company went on to stress its compliance with its disclosure obligations, while Seek’s management reiterated their confidence in the company’s long-term outlook.

Seek took particular issue with Blue Orca's characterisation of Zhaopin – noting that the company creates strong cash flow and has been profitable for more than a decade.

Seek also took issue with a number of 'accounting matters' that Blue Orca flagged, stressing that it remained consistent in its application of International Financial Reporting Standards.

Commenting on these matters, Andrew Bassat, Seek’s Chief Executive and Co-founder, said:

'We accept that market participants have different opinions, however this report is littered with inaccuracies.’

Despite those ‘inaccuracies’ – when trade in Seek’s stock resumed this morning, it was bid close to 4% lower in the first half hour of trade – to $20.66 per share. A slump, to be sure, but one that is a far ways from Blue Orca’s $7.20 per share valuation.

Want to take a position in Seek – long or short?

Create an IG trading account or log in to your existing account to get started now.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Act on stock opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.