Temenos fell as much as 33%, wiping its market capitalization by $2.4 billion after Hindenburg Research took a short position in the stock, alleging serious deficiencies in the Swiss banking software company's books.
Activist short seller Hindenburg's report suggests “serious accounting irregularities” at the financial sector software maker. Temenos also engaged in “revenue manipulation,” the report said, adding that this practice was an “open secret” within the company.
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Temenos did not respond to requests for comment from Bloomberg News.
Shares were trading 32% lower at 60 francs as of 2:03 p.m. on the Zurich market, the steepest decline since late 2002. It is now worth about a third of its peak value of 13 billion Swiss francs ($14.7 billion) in 2019.
Last year, Hindenburg Research, run by Nate Anderson, targeted the empires of prominent businessmen around the world, including Gautam Adani, Jack Dorsey and Carl Icahn, at one point losing money on their companies' market capitalizations. He wiped out billions of dollars and became a household name.
Bloomberg Intelligence analyst Tamryn Bason said the report could undermine the “positive sentiment” Temenos' potentially questionable 2023 performance brought after a “disastrous 2022.” Stated. He said the company may address the allegations during the capital market day on February 20.
Temenos has long been a target of takeover companies including EQT AB, Permira, Nordic Capital, Thoma Bravo and KKR&Co. Acquisition talks broke down in 2022 due to technology valuation and price concerns.
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The Geneva-based company is also in the midst of a long-term search for a chief executive officer. The company's chairman, Andreas Andreades, is currently serving as interim CEO after Max Tuard resigned in January 2023 following activist pressure.
Temenos creates cloud-based software that financial institutions can use to provide digital banking solutions, foreign exchange, and identity verification services. It is used by more than 3,000 of his customers, including Standard Chartered, Julius Baer and Nordea, according to the company's website.
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