Wandisco shares are suspended as the cloud data company flags potential internal fraud and lowers revenue expectations – days after revealing US listing plans
- Company reports ‘significant, sophisticated and potentially fraudulent irregularities’
- Revenue could be around 60% lower than forecast at just $9 million
Wandisco lowered its revenue expectations and requested a suspension of its shares after discovering “significant, sophisticated and potentially fraudulent irregularities” in its sales data.
The cloud data specialist, which last week revealed plans to list its shares in the United States in a bid to attract a higher valuation, told investors on Thursday that the ‘irregularities’ gave rise to a possible misrepresentation of his financial situation.
Wandisco could now post sales as low as $9m (£7.6m), around 60 per cent below the previous forecast of $24m, and the group ‘no longer has faith’ in its booking expectations for the full year, he said.
Shares in cloud data company Wandisco have been suspended as potential fraud was discovered
The group is currently conducting an investigation with outside legal and professional advisers into “the nature of this activity and its true financial situation”, Wandisco said, and has requested that its shares be suspended from trading on AIM in the meantime. .
Wandisco said: “Following investigations by the CFO and CEO, and reported to the Company’s Board of Directors, significant, sophisticated and potentially fraudulent irregularities in purchase orders received and revenue and bookings associates, represented by an employee sales manager, were discovered.
“These irregularities give rise to a possible material misstatement of the company’s financial position.
“The identification of these irregularities will have a material impact on the Company’s cash position and will lead to material uncertainty regarding its overall financial condition and significant going concern issues.”
Wandisco shares, which are now suspended, stood at 1,324.4p at last night’s close, reflecting growth of more than 360% year on year.
Victoria Scholar, Head of Investments at Interactive Investor: “These potentially fraudulent irregularities represented by a senior sales employee could spell financial disaster for Wandisco.
“He has already pointed out that sales could be less than half of his earlier expectations and his financial outlook has been called into question. At the company’s request, trading in the shares on AIM has been temporarily suspended while an investigation with outside legal and professional advisors is ongoing.
“After an impressive year-to-date share price performance, up 43%, this black swan event has the potential to sharply derail its bullish trajectory and cause a significant negative revaluation of the stock. valuation of the action, depending on the result of the results.
The company, which is headquartered in Sheffield and San Ramon, Calif., and listed on the London Junior Market, confirmed last week that it was in the “early stages of proactive exploration” of an additional US listing.
This followed shortly after Arm and CRH offered cold shoulders to London markets, raising concerns about the capital’s waning ability to attract big business.
Wandisco operates globally, but its largest revenue market is North America.
Wandisco shares, which are now suspended, stood at 1,324.4p at last night’s close, reflecting growth of more than 360% year on year.
