Technology
Heading for a brick wall - as occurs all too often with this cyber security firm, the latest trading update is of limited value as it includes too many numbers that cannot be verified. However, the key message, pressure on customer growth, is very important since customer growth has financed the business model so far. At the FY22 results, Teun Teeuwisse already noted the mismatch between sales commissions and reported ARR, client and revenue growth. As DARK’s shares slump below its IPO price, he is happy to remain short.
Edition: 152
- 20 January, 2023
Merger and Acquisition scoops
Darktrace (DARK LN) - on Aug 15th with the shares trading at 420p Betaville revealed that the company was at the centre of takeover speculation. DARK subsequently confirmed it had received an approach from US PE firm Thoma Bravo, pushing the cybersecurity company's shares ~25% higher.
Micro Focus (MCRO LN) - on Feb 10th with the shares trading at 466p Betaville revealed that the company was under the spotlight amid takeover talk. Canadian software company Open Text and MCRO have just announced a recommended takeover offer at 532p a share.
Bunzl (BNZL LN) - one of Betaville's latest alerts reveals the FTSE 100-listed distribution giant to be the centre of takeover speculation. This story is yet to be confirmed...
Edition: 143
- 02 September, 2022
Technology
H1 results may appear strong but weak disclosure raises many questions - since there is no competitive reason for the reduced disclosure, one must assume that the company is attempting to hide reality. DARK’s business model is built on its aggressive sales approach and financed by client’s prepayments. Meanwhile, management has no incentive to control costs. A lack of product development also puts pressure on the sales model. However, if they do lift R&D spending to the industry average, then the company will become a serious cash burner and the growth model no longer finances itself.
Edition: 131
- 18 March, 2022
Darktrace
Technology
Negative CEO Interviews & Diligence - A must-read report from the team at Paragon Intel as Darktrace confirms plans for a £3bn London float. Paragon's interviews with 8 former Senior Executives at the cybersecurity firm provide vital information on key individuals while shedding light on the cultural deficiencies, unsustainable sales tactics and governance/ownership concerns. Having uncovered multiple red flags, Paragon say this is the worst group of interviews they have received on an executive and company.
Edition: 108
- 16 April, 2021