Tyro Payments shares on the rise again after rebutting last week’s short-seller report
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Last week was tough for EFTPOS company Tyro Payments (ASX:TYR), with a terminal outage and a short-seller report but investors have responded well to its rebuttal.
The stock fell 30 per cent last week after the terminal outage and Friday’s report by short-seller Viceroy Research.
Short-sellers such as Viceroy release research reports critical of stocks – often targeting stocks otherwise unblemished in the eyes of investors. They often hold a “short” position on the stock and will profit if it goes down.
Often companies can shrug off the accusations with Seek (ASX:SEK) being one recent target. But if companies have underlying problems it can be the beginning of the end.
One recent example of a stock not recovering from a short-seller is Blue Sky, which at peak had a market capitalisation above $1 billion but fell into receivership in 2019.
Tyro shares were halted on Friday morning until this morning upon which the company issued a rebuttal of Viceroy’s accusations.
This morning they gained 15 per cent but are still down 17 per cent since January 8 and slightly below its $2.75 IPO price.
Tyro identified 10 statements that were false about the current situation and its technology generally.
The accusations included under-reporting the situation, not having a contingency plan for these scenarios, not appropriately supporting its merchants. Viceroy also asserted Tyro’s product offering was over a decade old and would cost approximately $12 million to replace.
Tyro said 15 per cent of merchants were impacted but this was well below the 50 per cent alleged by Viceroy. It said the repair would involve “collecting the impacted terminals from the field and implementing an immediate software update” and it had been supporting its customers all along.
Tyro also fired a shot at Viceroy and short sellers generally.
“The report follows a familiar playbook used by overseas domiciled and unregistered operators seeking to generate uncertainty, so as to directly profit from or facilitate others to profit from their research,” it said.
Tyro also said it was “fully focused on bringing its impacted merchants back online as rapidly as possible and to provide all assistance it can to minimise the disruption caused.”