Darktrace shares sink as investor cuts stake
CYBER-SECURITY company Darktrace sank to a two-month low after a major investor dumped a chunk of its stake on the cheap.
the stock dropped 5.1pc, or 32.5p, to 600p after private equity firm Vitruvian Partners sold 11m shares at 580p each, an 8.3pc discount to the previous closing price, for £63.8m.
As a result, its stake has been cut to just under 3pc from around 4.6pc. the move followed the end of a 180-day ban on share sales from investors that backed the company when it listed in April, known as a ‘lock-up’ period.
Darktrace floated at 250p and soared in value. However, the price has declined sharply since late October after Peel Hunt published a note saying it was overvalued. before the broker’s assessment, the shares were changing hands at around 945p.
they are still well above their listing price, meaning Vitruvian made a gain of over 130pc. but the sale is likely to increase fears that a wider sell-off could begin if other early backers cash out. Among these is controversial tech investor Mike Lynch, who, with his wife Angela bacares, owns around 16pc. Lynch is facing an extradition battle to the us to face fraud charges which he denies.
‘investors will need to decide if these [share price falls] are just teething pains or if there are genuine questions about the credibility of the company’s Ai-based technology’, said AJ bell director russ Mould. ‘those who remain believers in the underlying story will probably be able to dismiss the recent volatility in Darktrace as noise, however the longer the shares keep falling, the more difficult it will be to tune out.’
the FTSE 100 fell 0.4pc, or 25.92 points, to 7248.49 while the FTSE 250 slipped 0.1pc, or 23.03 points, to 23,116.97.
software and it firm Micro Focus was one of the biggest risers in the mid-caps after inking a deal to sell its archiving and risk management business to us firm smarsh for £275m.
the proceeds of the sale, which is expected to complete in the first quarter of next year, will be used to pay down debts.
the shares were up 10pc, or 36.5p, at 399.9p.
Royal Mail rose 1.5pc, or 6.5p, to 439.2p, after being upgraded by analysts at ubs. the investment bank raised its rating on the stock to ‘neutral’ from ‘sell’, saying the market was now pricing in concerns over the UK’s labour shortages and wage pressures caused by inflation.
brickmaker Ibstock climbed 1.7pc, or 3.4p, to 206.2p as strong demand from builders and the repair and maintenance market lifted performance in the third quarter. it plans to invest £50m in a new factory in yorkshire.
Morgan Sindall, the Ftse 250 construction group, upgraded its full-year forecasts amid strong trading in the last three months.
its secured workload at the end of september rose 11pc year-onyear to £8.9bn. the shares rose 1.4pc, or 30p, to 2260p.
Drinks bottler Coca-Cola HBC flagged up a ‘sharp acceleration’ in revenue growth in the third quarter as the reopening of restaurants, pubs and bars following lockdown boosted demand.
sales were up 17.1pc year-onyear alongside volume growth of 13.1pc. However, the shares dropped 3.4pc, or 89p, to 2516p.
Meanwhile, the irish packaging group Smurfit Kappa highlighted a 10pc increase in earnings to £1.1bn in the nine months to the end of september, which was boosted by higher costs being offset by increased prices for its corrugated cardboard.
it has also approved £508m worth of projects over the period to meet growing demand bolstered by the surge in online shopping and a shift towards sustainable packaging. shares dipped 0.5pc, or 20p, to 3846p.