Temenos stock price dives as short-seller Hindenburg takes aim

By Louis Goss

Shares in a Swiss software maker plunged as much as 34% on Thursday after short-seller Hindenburg Research accused the company of manipulating its accounts.

In a report, the short seller said its four-month-long investigation had revealed "major accounting irregularities" at Temenos (CH:TEMN), as the New York fund said it has now started shorting the Swiss company's shares. Temenos was approached by MarketWatch for comment.

The publication of Hindenburg's report saw shares in Temenos plunge 26% on Thursday. Shares in Temenos had previously advanced by 27% over the past 12 months.

Hindenburg's report says Temenos used "aggressive accounting practices" to help "gloss over" deeper problems inside the company, including widespread customer dissatisfaction with its banking software systems that led to major attrition of its customers.

The Swiss software developer's CEO Andreas Andreades encouraged aggressive accounting tactics while failing to recognise "deficiencies" in Temenos' products that were driving customers away from the company, Hindenburg's report says.

Hindenburg's report says that Temenos' executives have sold $1.1 billion worth of stock in the company over the past 10 years, while purchasing just $26 million worth of shares in the company over the same period.

Hindenburg Research derives its name from the 1937 Hindenburg Disaster, which it describes as "the epitome of a totally man-made, totally avoidable disaster." The short-seller says it aims to shed light on "man made disasters floating around in the market."

Hindenburg said Temenos told it that it will "fully investigate" its allegations.

The New York fund, which was founded by Nathan Anderson in 2017, attracted significant attention in 2020 after publishing a report that raised allegations of fraud inside electric vehicle maker Nikola Corporation (NKLA), that saw shares in the company drop 40%.

More recently Hindenburg has taken aim at Carl Icahn's Icahn Enterprises (IEP).

-Louis Goss

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02-15-24 0957ET

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