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Shares of Swedish telecommunications firm Sinch tumbled over 20% on Monday after a short-selling research firm alleged the company overstated results.
Ningi Research said Sinch
SINCH,
acquired harmful assets and misstated accounts to beat analyst estimates.
In particular, Sinch was alleged to have booked accrued revenue as unbilled accounts received. “In reality, accrued revenue grew by 332% instead of a decline of 25% as implied by the published numbers,” the report said.
The research company also said Deloitte found material weakness at an Indian subsidiary that wasn’t disclosed by executive management.
Sinch didn’t reply to a request for comment. An automatically generated email points out the company is in a blackout period ahead of its second-quarter earnings report due on July 21.
The analysis firm Breakout Point noted that Sinch was a popular bet among short-sellers, with firms including Arrowstreet Capital, Gladstone Capital, Marshall Wace and Point72 betting against the company.
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