LONDON (Reuters) – SES Imagotag shares climbed nearly 40% on Friday following the release of a new report from short-selling specialist Gotham City Research which analysts said did not provide a new information on the finances of the French leader in electronic labeling for mass distribution.
The stock’s listing was briefly suspended after surging in volatile trading. The title was up 36.3% at 120.40 euros at 11:00 GMT, after climbing up to 42%.
Gotham City reiterated its concerns about the company’s accounts, already expressed in late June in a report that led to a nearly 60% drop in SES Imagotag stock in one day.
Analysts, however, said the second report was not as negative as many feared.
Gotham City declined to comment. SES Imagotag told Reuters the company would respond in due course.
The second report focuses on the cash flow and accounting of the electronic tag manufacturer and its subsidiaries.
It also details the background of the company’s board of directors and raises questions about the independence of its members.
Maxence Dhoury, an analyst at Portzamparc, told Reuters that, at first glance, the second report did not appear to be as “harsh” as the previous one, which helped explain the stock’s sharp rise.
Gotham City’s first report, published on June 22, pointed to accounting anomalies in the business relationship between SES Imagotag and BOE Technology Group, a Chinese display maker, which happens to be both the largest shareholder, a supplier, an important customer and a member of the board of directors of the French group.
SES Imagotag has refuted the Gotham City allegations. On June 26, the company said that a new review by external auditors concluded that it had not overstated its turnover and had not increased transactions with BOE.
(Reporting Nell Mackenzie, Amanda Cooper and Lucy Raitano in London and Michal Alesandrowicz in Gdansk; French version Augustin Turpin, editing by Blandine Hénault)
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