(Boursier.com) — SES-imagotag was booked lower this morning on the stock market before the stock was suspended at 12:39 p.m. at the company’s request, pending the issuance of a press release and until further notice. The group is the victim of attacks by Gotham City Research, well known for having revealed the Let’s Gowex scandal or having alerted about the German Wirecard. The short seller has thus published a report in which he accuses the specialist of electronic labels and management systems for large retailers of accounting abuses and irregularities. “BOE is the largest shareholder, largest supplier, one of the largest customers, JV partner and audit committee member. Risk of financial malfeasance is high,” Gotham City tweeted. the Chinese shareholder of SES-imagotag.
“We believe that the financial statements are materially misleading, incorrect and insufficient, and that an independent and complete investigation would confirm our opinions”, still launches the sulphurous firm known for its downward positions. “We have identified accounting irregularities (…) which lead us to believe that SESL’s financial statements will have to be restated”, insists Gotham City Research, which claims that “2020-2022 revenues are overstated by at least 7% at 13% and 2022 EBITDA is overstated by 106%”. The short seller also mentions debts and receivables vis-à-vis BOE which would not be disclosed by SESL. Furthermore, the agreement walmart recently announced would be “not profitable for SESL, based on our economic calculations per unit,” says Gotham City, which calculates a unit payment from Walmart of 5.30 euros but a cost to SESL of at least 6.66 euros by electronic shelf tag.
Regarding cash generation, Gotham City is no more tender: “SESL has not generated sustainable cash flow since its creation. Its 2022 free cash flow is -48 million euros and its cumulative free cash flow 2002-2022 is -€159 million,” the short seller estimates, “SESL’s shares would trade between €15 and €30 per share, if its shares were simply trading in line with the valuation of its peers. “.
Recall that SES-imagotag announced a new agreement with Walmart at the end of April for the deployment of the latest generation VUSION platform in several hundred Walmart stores in the United States. This contract will extend over several years, with a first phase concerning 500 stores which will take place over the next 12 to 18 months, for a total of 60 million electronic labels, with the opportunity for a wider extension within of the brand’s store base. The group has yet to react to the heavy attacks from Gotham City Research.
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