- Accusations date to deals done before its IPO
- Some stockbrokers are dismissive of their relevance
Cyber security company Darktrace (DARK) has rebutted claims from New York short seller Quintessential Capital Management accusing it of beefing up its revenues by selling products to resellers even when they didn’t have customers lined up. If the resellers then failed to find customers, Quintessential alleged that Darktrace paid to host joint marketing events with them as a way of supporting resellers.
Analysts have previously argued that Darktrace has underspent on research and development (R&D) compared with spending on other parts of the business, such as marketing. Last year, sales and marketing costs were $233mn (£193mn). This was up 23 per cent on the previous year and five times the R&D budget. This investment in marketing has translated into strong growth, with revenue up 45.7 per cent and annual recurring revenue up 42.6 per cent.