Shares in the London-listed cybersecurity firm Darktrace have crashed to a record low after accusations of major errors in the company accounts.
In a report from US asset manager Quintessential Capital Management (QCM), published yesterday, Darktrace was said to have inflated its value through questionable accounting prior to its IPO in April 2021.
Yesterday, Darktrace shares hit their lowest value since it first listed on the London Stock Exchange, dropping to £1.98 By the end of trading on Tuesday, the share price was at £2.10, compared to an IPO value of £3.30 and a peak value of £9.45 in October 2021.
QCM wrote in its report: “After a careful analysis, we are deeply sceptical about the validity of Darktrace’s financial statements and fear that sales, margins and growth rates may be overstated and close to a sharp correction”.
A spokesperson from Darktrace said: “We have rigorous controls in place across our business to ensure we comply fully with IFRS accounting standards.”
Darktrace added said it had not been contacted by QCM prior to the publishing of its report.
The cybersecurity firm has had multiple stock plunges since it reached its peak value in 2021. In April of last year, the company faced an 11% drop, followed by a 30% drop in September after an acquisition from the US-based private equity firm Thoma Bravo was called off.
In its January financial report, Darktrace cut its revenue forecast after facing what the CFO described as a “very pronounced” slowdown in sales towards the end of 2022.