Spruce Point flags risk to Samsara's revenue growth over accounting practices (updated)

Samsara (Pre-Reincorporation)

21/09/2023 14:54

(Adds details in paragraph 2,3 and 5)
       Sept 21 (Reuters) - Spruce Point Capital Management on
Thursday flagged risks to revenue growth at Samsara  IOT.N  over
some of the accounting practices at the internet of things firm,
and recommended a strong sell on its stock.
    The company is overstating gross as well as earnings before
interest, tax, depreciation and amortization margins by 664
basis points and 1,176 basis points, respectively, the short
seller said based on a forensic audit and multiple Freedom of
Information Act requests.
    "We believe Samsara's valuation premium is likely to
compress. We see up to 45%-75% downside risk to $6.30-$13.90 per
share," Spruce Point said in its report.
    Samsara, whose shares have more than doubled so far this
year, did not immediately respond to a request for comment. 
        Its stock was down 2.7% at $24.55 in early trading. The
company had raised more than $800 million in its initial public
offering in December 2021.

 (Reporting by Yuvraj Malik in Bengaluru; Editing by Arun
Koyyur)
 ((yuvraj.malik@thomsonreuters.com;))