SES Imagotag jumps more than 40% as investors snub Gotham City report (updated)

Vusion SA

07/07/2023 09:23

(Adds share halt in paragraph 2, detail)
    By Nell Mackenzie, Amanda Cooper and Michal Aleksandrowicz
       LONDON, July 7 (Reuters) - SES Imagotag's  SESL.PA 
shares rose by more than 40% on Friday following a new report
from hedge fund Gotham City Research that analysts said failed
to provide new information on the French smart label maker's
finances.
    Trading in the stock was halted briefly after shooting up in
volatile trade. They were last up nearly 41% in Paris, on course
for their biggest one-day gain on record.
    Gotham City reiterated concerns about the firm's accounts
which it raised in late June, a report that triggered a nearly
60% fall in SES Imagotag shares in a day.
    But analysts said the second report was not as negative as
many had expected, given the market impact of the first report. 
    The second report was not as bad as investors feared, said
an equity capital markets banker who wondered if Gotham would
lose credibility because of it. 
    Gotham City was not immediately available for comment when
contacted by Reuters.
    SES Imagotag told Reuters that it would respond in due
course. 
    The second report focuses on the cash and accounting of the
electronic label maker and its subsidiaries.
    It also details the background of the company's board and
raises questions over whether its members are independent.
    Gotham City's first report on June 22 cited accounting
discrepancies regarding SES Imagotag's business relationship
with BOE Technology Group, a Chinese manufacturer of LCD, OLEDs
and flexible displays.  
    In response, SES Imagotag  SESL.PA  on June 26 said a new
examination by external auditors had concluded it did not
overstate revenue nor did the company buy and sell repeatedly on
round trip transactions between its Chinese business partner,
BOE, refuting allegations made by Gotham City.
    SES Imagotag said auditors Deloitte and KPMG provided it
with a certificate indicating that transactions with BOE for a
total amount of 53.1 million euros ($57.94 million) were
neutralised and were not part of its revenue totalling 620.9
million euros at December 31, 2022.

 (Reporting by Nell Mackenzie, Amanda Cooper and Lucy Raitano in
London and Michal Alesandrowicz in Gdansk; editing by Jason
Neely)
 ((amanda.cooper@thomsonreuters.com; +442031978531; Twitter: https://twitter.com/a_coops1;))