ShadowFall hedge fund targets shares in Darktrace
A hedge fund trader known as the ‘Dark Destroyer’ has turned against Darktrace.
ShadowFall Capital, which is led by Matthew Earl and best known for exposing the Wirecard scandal, has shorted shares in the £2.4bn cyber security group.
This means it will make money if Darktrace’s share price falls in value.
FTSE 250-listed Darktrace has had a tough time since joining the London Stock Exchange in 2021. But its shares have rallied this year, with its value up by a third.
In September the company said annual profits had risen eightfold to around £33m.
Questions: FTSE 250-listed Darktrace has had a tough time since joining the London Stock Exchange in 2021
However, the group, which was founded in 2013 by cyber defense experts, also said it had lowered its expectations for future revenue. ShadowFall has shorted 0.52 percent of Darktrace shares – 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 payment processor Wirecard.
Earl first raised the alarm about a suspected fraud in late 2015 – years before Wirecard collapsed in 2020.