WiseTech shares plunge 12% before second trading halt is initiated
WiseTech’s shares have again been placed in a trading halt, as a second short report from Jcap reveals a new set of alleged issues.
WiseTech share price continues to fall
Just when you think you’ve caught a break…
The WiseTech (ASX: WTC) share price was hammered again today – falling 12.33% to A$26.30 after it exited its trading halt. Mind you, it was swiftly put in another, as a second Jcap ‘short report’ was released to the market.
While the first short report focused on the allegation that the WiseTech growth story wasn’t as rosy as it seemed – as well as a few other touches, such as claims concerning the ‘abrupt’ resignation of WiseTech’s Head of the Audit Committee, the second was more focused on the ‘customer experience’.
Taking one step back though. Last week WiseTech launched a staunch response to the first short report, noting that it contained ‘many claims and allegations that are untrue.’
Truth or untruth aside, these things indeed take on a mind of their own; and many market commentators have already noted that WiseTech’s astronomical valuation likely hasn’t helped matters.
The WiseTech response: ‘manipulation’
In response to the first short report, WiseTech (ASX: WTC) Founder & CEO, Richard White, commented that:
‘We are very concerned that the allegations in the document may mislead and manipulate the market to the detriment of WiseTech’s business and its shareholders, large and small.’
Mr White further added that WiseTech’s:
‘Financials, our revenue, our profits, our growth rates and our product have all be verified comprehensively and form part of the external independent audits conducted annually.’
The second wave
Such a response didn’t stop Jcap from releasing a second short report today, which focused on customer acquisition and retention.
Jcap’s new biggest issues: WiseTech's initial response was weak and the company’s acquisitions are 'poorly integrated and underperforming.'
Jcap got a total of 18 'former employees and competitors' to back up the integration claim.
Jcap also commissioned a survey of 13 of WiseTech's customers, finding that 25% of these customers were considering taking their business elsewhere. Three-and-one-quarter of a customer(s) aside, all up, WiseTech has around 12,000 customers, according to the AFR.
Jcap also noted that:
'When WiseTech does attempt to integrate these businesses, it usually raises prices on existing customers, and they tend to go elsewhere.'
An intriguing point indeed. According Taylors Securities Director and Analyst:
‘We need to highlight the excellent client retention rate, averaging close to 99% recurring revenue, which should be a strong positive signal and give confidence to investors.’
Finally, WiseTech (ASX: WTC) announced that 'unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the commencement of normal trading on Wednesday., 23 October 2019 or when the announcement is released to the market.'
More to come.
This information has been prepared by IG, a trading name of IG Markets 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. See full non-independent research disclaimer and quarterly summary.
Act on share opportunities today
Go long or short on thousands of international stocks with spread bets and 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
- Take your position
- 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
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
