A hedge fund trader known as the ‘Dark Destroyer’ has turned against Darktrace.
ShadowFall Capital, which is led by Matthew Earl and is best known for exposing the Wirecard scandal, has ‘shorted’ shares in the £2.4 billion cybersecurity group.
This means it will make money if Darktrace’s share price falls in value.
FTSE 250-listed Darktrace has had a rocky time since joining the London Stock Exchange in 2021. But its shares have rallied this year and its value has risen by a third.
In September it said annual profits had ballooned eightfold to around £33 million.
Questions: FTSE 250-listed Darktrace has had a rocky time since joining the London Stock Exchange in 2021
However, the group, which was founded by cyber defence experts in 2013, also said it had cut its expectations for future earnings. ShadowFall has shorted 0.52 per cent of the Darktrace’s stock – a position worth around £12.7 million –according to data from City watchdog, the Financial Conduct Authority.
ShadowFall had previously raised questions about its leadership team, culture and products, but this is the first time a financial position has been disclosed. The hedge fund has made bets against fast-fashion group Asos and Apple supplier IQE in the past.
But ShadowFall is best known for its work exposing German payments processor Wirecard.
Earl first raised alarms about a suspected fraud in late 2015 – years before Wirecard collapsed in 2020.