Shares in cybersecurity firm Darktrace fell heavily on Monday, compounding last week’s sell off.
The business debuted on the London market at 250p in April. It went on to touch highs of around 1,000p and joined the FTSE 100.
But last week Darktrace’s share price fell sharply after Peel Hunt – which has a ‘sell’ rating on the stock – said there was a “disconnect” between the firm’s valuation and ultimate revenue opportunities.
The broker argued: “Having considered the potential market size, the intensifying competition and Darktrace’s limited R&D spend, we take a more grounded approach to our valuation, giving a target price of 473p. This implies a 50% downside.”
Peel Hunt’s note prompted a sharp sell-off, with the stock losing 8% last week.
The approaching end of the 180-day lock-up period has maintained the pressure, however, and as at 1245 GMT on Monday, Darktrace was off 13% at 698.82p.
The loss-making firm was set up in 2013 by Autonomy founder Mike Lynch. Along with his wife Angela Bacares, Lynch retains a 15.98% stake worth around £700m, and they – along with other major investors – will be free to start selling down their holding from Wednesday, the Mail on Sunday reported at the weekend.
Any major sales could depress the share price even further.
Lynch is currently fighting extradition to the US, where he faces fraud charges – all of which he denies – over the sale of Autonomy to Hewlett Packard in 2011.
