TaskUs drops after Spruce Point issues 'strong sell' opinion

Taskus

20/01/2022 15:48

** Shares of digital outsourcing firm  TASK.O  drop 11.6% at
$31.6 - down for sixth consecutive session and set for worst day
on record
    ** Spruce Point Capital Management issues a "strong sell"
opinion on the stock 
    ** Warns TASK has obfuscated growing financial strains, most
notably tied to Facebook (Meta Platforms)  FB.O , its
single-largest customer, while exaggerating size of its business
    ** "Highlight poor financial reporting, including omission
of annual contract value during the IPO Process and use of a
non-standard definition of annual employee attrition rate, which
we believe dramatically understates turnover" - Spruce Point
    ** "We are aware of a recent report by short seller Spruce
Point, which we believe is designed for the sole purpose of
negatively impacting TaskUs' share price for Spruce Point's own
benefit," a company spokesperson from TaskUs said in an emailed
response 
    ** Research firm also sees evidence that shows declining
financial performance in content security segment, an area TASK
claims leadership
    ** Spruce Point estimates 25% to 50% downside risk to
TaskUs' share price and instead believes investing in Concentrix
Corp  CNXC.O  and Luxembourg-based Majorel Group  MAJ.AS  
    ** As of last close, TASK has risen ~14.5% since its June
2021 debut


 (Reporting by Shashank Nayar in Bengaluru)
 ((Shashank.Nayar@thomsonreuters.com; within U.S. +1 646 223
8780; outside U.S. +91 80 6182 2256;))