Join our daily newsletter At The Bell to receive exclusive market insights
- Aerial imaging provider Nearmap (NEA) has put the brakes on trading while it responds to unspecified “potential legal proceedings”
- While no details were given, The Australian Financial Review’s Street Talk segment said it understands the action is being brought by U.S. rival Eagleview
- Notably, short seller J Capital Research published a report earlier this year, which hinted at potential trouble with Eagleview
- The news follows an after-market announcement released yesterday, in which the company upgraded its Annual Contract Value (ACV) guidance
- Prior to the trading halt, which is expected to remain in place until Friday, May 7, Nearmap’s shares were up 14.56 per cent to $2.36 each
Aerial imaging provider Nearmap (NEA) has put the brakes on trading while it responds to unspecified “potential legal proceedings.”
While no details were given, The Australian Financial Review’s Street Talk segment said it understands the action facing Nearmap is “being brought against it by U.S.-based rival aerial imaging outfit Eagleview,” which purchased a separate Australian aerial mapping business, Spookfish, in December 2018.
Notably, short seller J Capital Research published a report earlier this year, which said Nearmap was “in danger of losing its toehold in the U.S. insurance segment to an intellectual property challenge.”
J Capital argued that Nearmap’s 2019 acquisition of Pushpin was designed to capture a technology used for roof measurements, which would make the company more competitive in insurance claims. It said a large part of Eagleview’s business was the sale of “roof reports” to U.S. insurance companies, and that Pushpin’s technology could infringe upon Eagleview’s patents.
“According to a former senior manager at Eagleview, lawyers have issued warning letters to insurers,” J Capital said in the report.
“Should Nearmap be challenged, it may be required to pay a royalty to Eagleview, find a different way to do a map, or stop producing roof measurements and roof reports altogether in the U.S.”
It wouldn’t be the first time Eagleview has taken such legal action, after winning a case against New Jersey-based Verisk for patent infringement of its roof-measurement technology in October 2019.
The news comes off the back of a major share price climb brought on by an after-market announcement yesterday, in which the company increased its Annual Contract Value (ACV) guidance from between $120 million and $128 million to between $128 million and $132 million.
Nearmap said it had seen growth continue across its core industry verticals from both new and existing customers, which further reinforced the appeal of its subscription-based business model.
“This performance validates our strategy to focus on our core growth verticals of insurance, government and roofing, with the adoption of premium content types particularly strong from these verticals, driving returns from the investments we made into new and expanded content,” said Rob Newman, Managing Director and CEO of Nearmap.
Prior to the trading halt, which is expected to remain in place until Friday, May 7, Nearmap’s shares were up 14.56 per cent to $2.36 each.
