Temenos shares fell further on Tuesday as the Swiss company continued to suffer from allegations raised against it by short-seller Hindenburg Research, despite vowing to launch an independent review of the claims which have caused its stock price to crash. Â
The Swiss banking technology company has seen its share price drop by 30% over the past week, in the wake of allegations made by the New York short seller that it manipulated its balance sheets to boost its stocks.Â
Hindenburgâs report, published on Feb 15, alleged Temenos used âaggressive accounting practicesâ to âgloss overâ deeper problems inside the company that are leading to widespread dissatisfaction with its products and driving away its customers.Â
In seeking to address the allegations, Temenos in results published on Tuesday vowed to work with âindependent third partiesâ to carry out a âthorough examinationâ of Hindenburgâs allegations.
The Swiss fintech company also denied that the short sellerâs claims are true and instead described them as âinaccurate and misleadingâ.Â
âAs Chairman and former Audit Committee Chair, I want to assure you of my confidence that Temenos is running a sound business with good financial controls in place,â Temenosâ chairman Thibault de Tersant said in a statement.Â
Nonetheless, shares in Temenos
TEMN,
fell another 8% on Tuesday after plunging by 30% since publication of Hindenburg Researchâs report on Feb. 15. Temenos shares had previously increased by 30% in the year prior to publication of the short sellerâs report.Â
In a call with investors, Tersant, who was previously CFO of French software developer Dassault Systems
DSY,
added that Temenosâ review of Hindenburgâs allegations would be âspeedy but also thorough,â as he indicated it would take no longer than five months.Â
The company chairman noted that Temenos is currently in the process of hiring a âtop accounting firmâ to carry out a forensic analysis of the company, in line with plans to hire a âtop law firm in Switzerland and a top law firm in the USâ to complete the review.Â
The continued drop in the Swiss firmâs share price came as Temenos also posted better-than-expected results for the full-year 2023 that outstripped analystsâ expectations in generating sales worth $298 million in the fourth quarter of 2023, compared to the $286 million predicted by 16 company watchers polled by the Swiss firm itself.Â
Temenos in turn generated earnings before interest and tax worth $101.3 million, as it also raised its dividend by 9%, to Fr 1.2 per share ($1.36 per share), and said it was making âgood progressâ in its search for a new CEO to replace acting chief Andreas Andreades.
Tersant said the review may also delay Temenosâ search for a new CEO following former chief executive Max Chuardâs decision to step down in January after 20 years at the company.
In a statement at the time, Chuard said the decision to step down would âallow the next level of leaders to take the company forward in its next stage of growth.â
Temenosâ plunging share price, meanwhile, flew in the face of forecasts made by analysts at JP Morgan who predicted the strong results paired with Tersantâs ârobustâ response to Hindenburgâs allegations would âdrive some relief in the shares.â Â
