Is the software house S&T overrated?

British investor Fraser Perring thinks so.

He is behind a critical report by Viceroy Research, which triggered the biggest price fall in the history of the Austrian engineering company.

The shares listed in Germany, the majority of which are in free float, lost up to 34 percent on Thursday and, at 12.36 euros, were as cheap as they were last more than four years ago.

The price recovered somewhat on Friday and was around 14.50 euros in the early afternoon.

Michaela Seiser

Business correspondent for Austria and Hungary based in Vienna.

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The management of S&T announced that it would examine the report and the allegations contained therein in detail in the next few days.

It will then publish a detailed statement and a specific package of measures.

Some allegations concern old processes from the time before the current management and are neither with the current management board nor with S&T AG itself, it is said.

Before the Viceroy Report was published, there was no contact between Viceroy and S&T.

"We confirm that the operational performance of S&T AG is in the range of the current guidance for the 2021 financial year," said CEO Hannes Niederhauser.

Regarding the regulatory allegations raised, it is stated that, with the exception of S&T Romania, where there are investigations against several market participants because of alleged price fixing in procurement proceedings, no legal proceedings have been initiated against any company in the group by the competent authorities.

The manager backed up his statements with the purchase of 10,000 shares for a little more than 130,000 euros.

New focus

The reaction on the financial market to reports in similar cases has recently been violent.

The S&T share, courted by analysts, had soared between 2013 and 2018.

The price rose from a little more than two euros to 28 euros.

Since then he has been weakening.

Before Viceroy's report, it was hovering around the 20 euro mark.

The Viceroy investment company bets against publicly traded companies it believes are poorly managed. If their share price then falls, they earn money. Behind Viceroy Research is the short seller Fraser Perring, who has been known since the collapse of Wirecard at the latest. He was one of the early warnings in the scandal surrounding the payment processor. Since then, he has made people sit up and take notice with reports on the leasing specialist Grenke and the real estate company Adler Group. The share prices of the two companies also fell sharply after the allegations and have only been able to recover slightly since then.

S&T achieved a record number of orders in the third quarter, but cannot benefit fully from this due to the chip crisis.

The software house is examining a sale of IT services and an even stronger focus on the Internet of Things, i.e. technologies that enable the networking of physical and virtual objects.