Sinch swats aside short-seller a little too easily
12/07/2022 16:40
(The author is a Reuters Breakingviews columnist. The opinions
expressed are their own.)
LONDON, July 12 (Reuters Breakingviews) - As the chief
executive of a communication software company, Oscar Werner
knows the value of sending a clear message. Yet his calm
response to a short-seller attack at Stockholm-listed Sinch
SINCH.ST may only confuse shareholders.
Short-seller Ningi Research on Monday published https://ningiresearch.com/2022/07/11/research-report-sinch-ab-sfb-sinch
a report accusing Sinch, whose shareholders include SoftBank
Group 9984.T and Temasek, of incorrectly classifying invoices
that have not yet been billed as revenue, and overstating the
performance of operations in Australia and India. On a call with
analysts Werner said he “strongly opposes https://ml-eu.globenewswire.com/Resource/Download/acc8ca47-10d3-4bd2-9f61-97d32b69e3f4
” the allegations in Ningi’s report, and partly blamed its
receivables accounting on glitches from recent acquisitions. The
group reckons that Sinch can dispel any fears through its strong
results, and profitable cash flow.
However, Sinch, worth as much as $15.8 billion last year, is
still down by over a third in the last two days. It doesn’t help
that the group, whose tools help businesses communicate with
consumers via text message, voice and video, also warned
shareholders on Monday that a “reassessment” of historic costs
would hit its second-quarter results by 162 million Swedish
crowns. Given the stock reaction, Werner clearly needs to do
more. An independent review of Sinch’s books would be a start.
(By Karen Kwok)
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(Editing by Neil Unmack and Oliver Taslic)
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