Triterras, Inc. - Cryptic Dump
Summary
- TRIT received another short report last week, essentially claiming traffic was heavily driven by affiliates and realleging management's shady dealings and penny stock histories.
- Today the Company responded to some of the claims, authorized a $50MM share buyback, and reported insider purchases of 160K+ shares by management over the past few weeks.
- TRIT has become a battleground stock in this environment of "everything goes up". Weak responses and fluff PR/calls, combined with the Cayman incorporation and Singapore domicile, are red flags now.
- By the numbers, if they stand up to diligence, TRIT's disruptive model, large TAM, high margins and high growth support a stock in the $25 range based on 25x 2022E EPS power.
- That said, there are too many questions we cannot answer and management has done a poor job defending their empire. We want to see a PCAOB USA-approved audit firm sign off on the books and a few quarters filed with the SEC to address fears. We hate that the CEO indicated no corporate buyback on their 12/22/2020 update call, as "all funds were budgeted for growth", then bought stock in the open market. Now with those purchases and SPAC merger shares under water, magically a buyback is approved using investor money. Until then, given lingering risks and inability to trust what we read (both from the buyside from tainted banking analysts and from the sell side via short reports), we are cutting TRIT to SELL. We recommend investors exit positions and redeploy capital to stocks with clearer horizons, as this stock has now become a binary event.
TRIT 8K - PR, Investor Deck, Other
EDGAR Filing Documents for 0001213900-21-002643
TRIT Cap Table @ $8.08
Analyst's Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
We are dropping coverage of TRIT lacking proof of the Company's financials and a series of class action litigation. If things go south here, TRIT shares have severe downside risk and could trade to the low single digits towards cash value of $2-$3/share.
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