(BFM Bourse) – Gotham City Research has released a vitriolic research note accusing the smart label company of artificially boosting its revenue and bottom line.
He is a short seller who sets himself up as a vigilante. His name is thus a reference to the universe of Batman: Gotham City research. This fund notably counted among its victims the Spanish public WiFi specialist Gowex.
This time, Gotham City Research is attacking a French company: SES-imagotag, a world leader in electronic labels, which has experienced dizzying growth, won a huge contract with Walmart and seen its stock price explode (+112 % over one year and +580% over three years, before the opening on Thursday).
In a lengthy report released on Thursday, Gotham City Research found the group’s financial accounts to be “misleading, incorrect and incomplete.”
A course that would be overvalued
“We have identified accounting irregularities, which lead us to believe that the financial statements of (SES Imagotag) will need to be rectified,” said Gotham City Research.
“The turnover for the period 2020-2022 is overestimated by at least 7% to 13% and the Ebitda for 2022 by 106%”, he adds, specifying that an “independent and exhaustive investigation “should confirm his findings.
To simplify, Gotham Research City Research calls into question transactions with BOE Technology Group, a Chinese company allied with SES-imagotag and which owns 32% of the capital of the French company via a subsidiary, judging that these transactions constitute loops and inflate “artificially” the turnover of the company.
The fund also considers that the recent contract with Walmart is not profitable for SES-imagotag. He also believes that the action should be treated between 15 and 30 euros if the title of the company were to be exchanged on the basis of its comparables (against 166.8 euros currently).
An offensive to lead
Contacted by Reuters and BFM Bourse, SES Imagotag, which specializes in electronic labeling, was not immediately available for comment.
SES Imagotag shares were suspended from the Paris Stock Exchange towards the end of the morning, pending a press release from the company. Prior to this suspension, the stock was booked on the downside and was still previously listed down more than 20% in pre-open trading, according to Refinitiv data.
“The company will have to explain itself on a certain number of elements”, judges a financial intermediary. “But to counterbalance, we must remember that SES-Imagotag has real technologies and has convinced Walmart, therefore, to deploy them in its stores, but also other major brands such as Fnac Darty and Sephora. The company benefits from a good reputation with its customers,” he adds.
To see however if the attack of Gotham City Research will not give a blow of penknife to this reputation.
By Julien Marion with Reuters
Julien Marion – ©2023 BFM Bourse
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