WiseTech Founder, Richard White
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  • WiseTech and J Capital are keeping up their hostile back-and-forth, with WiseTech responding today to the second scathing J Capital report in the last week
  • The tech giant has been accused of misleading the market through profit overstatements, false claims of organic growth, and deliberately confusing reports
  • WiseTech continues to deny the claims, and has responded to each report by refuting the claims one-by-one
  • While WiseTech’s market value took a beating last week, today’s response saw the company recoup a big portion of the losses brought on by J Capital’s articles
  • WiseTech closed 8.48 per cent up today, with shares selling for $28.53 each

It’s another bout of “he-said-she-said” today between tech giant WiseTech and China-based independent research company J Capital.

WiseTech’s shares dropped almost 30 per cent over the last week when J Capital released a scathing “Illusion of Success” report.

In J Capital’s report, WiseTech stood accused of misleading the market by huge profit overstatements, false claims of organic growth, and deliberately confusing reports.

WiseTech quickly requested a trading halt before releasing its response, but not in time to prevent over $1 billion being wiped off its market value as its share price declined. In its response, WiseTech vehemently fought the allegations and called J Capital’s report “untrue”.

But the story is far from over: J Capital released another report early this week hitting back at WiseTech’s defence.

The second article said WiseTech’s response was “cherry picking immaterial points” while “remaining silent on major points”.

It also took some shots at WiseTech’s $400 million worth of company purchases.

“WiseTech’s acquisition spree looks like a frantic effort to maintain the narrative that this is a fast-growing technology business,” the report read.

WiseTech, however, has once again responded to the allegations, but this time seems to have satisfied the market; the company has managed to recoup half of the past week’s losses today.

“WiseTech rejects the claims of financial impropriety and irregularity contained in the [J Capital] Report,” WiseTech said.

The company went through each of the J Capital report’s claims — which it refer to as “wrong and misleading” as it refuted them one-by-one.

Richard White, WiseTech’s founder and CEO, said: “Regardless of the noise and market disruption of these short-seller, self-serving and misleading claims, we will continue to strive to ensure our shareholders are informed about the fundamental performance of our business.”

J Capital’s Co-Founder and Research Director Anne Stevenson-Yang once again took to Twitter to voice her thoughts on the WiseTech response.

The $WTC “rebuttal” confirms many of our assertions and otherwise just reiterates report statements without support. Tiresome. read actual information at http://www.jcapitalresearch.com— ASY (@doumenzi) October 23, 2019

A Tweet from Ann Stevenson-Yang’s personal account today

Regardless, for the time being, it seems WiseTech’s shareholders are not quite convinced by the J Capital report, with WiseTech closing 8.48 per cent in the green today.

Shares in the ASX 200 tech company are currently worth $28.53 each in a $9.08 billion market cap.

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