After a day of back-and-forth between Spruce Point Capital and PTC Inc (NASDAQ:PTC), Spruce Point reiterated its short-sell position to Benzinga and stood by its negative assessment of PTC.

“Our in-depth forensic research leads to the inescapable conclusion that investors have over-valued the company and overlooked such factors as its poorly executed subscription model transition, aggressive use of unsupportable non-GAAP financial measures, and over-hyped but underperforming Internet of Things business,” a firm representative said.

The activist investment manager had accused the company Thursday of violating SEC disclosure requirements and GAAP financial reporting guidelines.

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In a short thesis predicting 50 to 60 percent downside, Spruce Capital evaluated “weak financial results in favor of dubious metrics,” which are unrelated to future revenues.

“PTC’s five-year recurring restructuring odyssey appears to be an elaborate accounting scheme to sell investors on meaningless non-GAAP figures,” Spruce Capital wrote. “We’ve done a deep dive analysis and are shocked by PTC’s overstatement of office locations, and irreconcilable employee headcounts. Are they just firing and re-hiring people to expunge expenses?”

PTC responded Friday afternoon by justifying its use of GAAP measures and subscription performance metrics as common practices among software companies.

“The company believes it is existing the subscription transition trough and that its results will begin to reflect the expected benefits of our strategic execution and business model transition, including accelerated revenue growth, margin expansion, and earnings growth, that we expect will translate into even greater returns for PTC shareholders,” PTC wrote in a statement.

Following PTC’s response, Spruce Point tweeted a note of caution to stakeholders.

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