Temenos sinks most in 21 years on Hindenburg short report

Temenos plunged as much as 33%, slashing its market value by $2.4 billion, after Hindenburg Research alleged serious flaws in the Swiss banking software company’s books and took a short position in the stock.

The report by activist short-seller Hindenburg suggests “major accounting irregularities” for the software maker for the financial sector. Temenos also “manipulated earnings,” according to the report, which adds that these practices were an “open secret” within the company.

Temenos didn’t respond to a request for comment from Bloomberg News.

The shares traded 32% lower at 60 francs as of 2:03 p.m. in Zurich, the biggest drop since late 2002. It’s now worth about a third compared to its 2019 peak of 13 billion Swiss francs ($14.7 billion).

Hindenburg Research, run by Nate Anderson, rose to prominence last year when it targeted the empires of high-profile businessmen across the world like Gautam Adani, Jack Dorsey, Carl Icahn, wiping out billions from their firms’ market capitalization at one point.

Bloomberg Intelligence analyst Tamlin Bason said the report may erode the “positive sentiment” that Temenos’s potentially suspect 2023 results provided following a “disastrous 2022.” The company may address the allegations during its capital markets day on Feb. 20, he said.

Temenos has long been a target for buy-out firms including EQT AB, Permira, Nordic Capital, Thoma Bravo and KKR & Co. Takeover talks fell apart in 2022 due to tech valuations and pricing concerns.

The Geneva-based company is also in the midst of a lengthy search for a chief executive officer. The company’s chairman Andreas Andreades is currently the interim CEO after Max Chuard stepped down in January 2023 following activist pressure.

Temenos creates cloud-based software that financial institutions can use to offer digital banking solutions, foreign exchange and identity verification services. It’s used by more than 3 000 clients including Standard Chartered, Julius Baer, and Nordea, according to its website.

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