It's a fascinating sequence of events and rather gut-wrenching for holders. No matter the quality of the accusation, it's upsetting to see your portfolio drop and the nature of the report's loud noises wash over you: is WiseTech not quite what it seems?
I've watched as structured shorters took down other companies, notably Blue Sky and Quintis, and perhaps less "short" motivated, We(Work). I've been quietly impressed/horrified at the rapid unraveling of genuinely dodgy schemes and mechanisms in place, and how well the shorters (and commentators) were able to unearth what amounted to a mix of greed, delusion, or delusions of grandeur, and alleged fraud.
I like the responses that say things like: "Quintis ... rejected the Glaucus research as a “self-serving report by a shorter of the stock in an attempt to drive TFS’s share price down for their own financial gain”.
Indeed. Nobody works for free. It's a public market. Any man and his dog is able to publish a report and hold a position, while admitting it, hopefully.
So, of course J Capital have a short position, and motive, but at least they have what it calls "research".
I'm pleased that the substance of the report is, or appears to be, pretty flimsy. Or much flimsier than I imagined given it was picked up by mainstream media.
1. Directors selling/leaving. At least two of the directors are significant early investors in Mike Gregg and Charles Gibbon. Are directors expected to just hold their shares forever? I don't understand this - they still hold very large positions. The retirement of Christine Holman after only a short stint is more of a flag, but it's only speculation that it could be a red flag. black, or white.
2. Acquisitions. The fact that none of the executives of the 30+ acquisitions have left is a significant dent in any claim that acquisition have been hasty. From memory, almost none of the acquisitions were designed to inject revenue, but inject expertise (on a regional basis, or new IP) and give the software a push.
3. I don't feel like this is unexplainable: "Revenue grew at a 12.5% CAGR in the six years before listing. After listing, revenue growth leapt to 40% annually." Dominant cloud software is experiencing absolute growth everywhere.
As for unhappy clients, and the comparison to Atlassian, let me say JIRA is one of the more actively despised pieces of software in use. It's also incredibly powerful, useful, and almost unavoidable, and it gets the job done for clients, and Atlassian. I'm not intimate in the world of logistics but claims that CargoWise isn't a joy to use is hardly unexpected, and I have to trust the 99% retention rate. (As an aside, Xero emerged as a joy to use for accounting in businesses, and remains pretty good!)
On the issue of revenue, I'm open to being told. I don't have a hope of tracing this back, and I hope that WiseTech don't adopt this play-the-man-not-the-ball defensive posture that we've seen from others (hello Elon!) but a sensible explanation as far as it is warranted, and only if it is warranted.
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