Why Did Lightspeed Commerce Shares Plunge Today?

  • Spruce Point Capital Management conducted a "forensic financial and accounting review" on Lightspeed Commerce Inc LSPD.
  • Spruce believes Lightspeed is a "cash degenerative" North American roll-up of point-of-sale commerce solutions that has "covered up massive inflation" of its total addressable market, customer counts, and gross transaction volume. 
  • Spruce Point says Lightspeed "is covering up increasing competitive pressures and double-digit organic declines in its business with a flurry of acquisitions." 
  • The short-selling firm thinks the share price could decline by 60% to 80% to $22.50- $47.00 per share. 
  • Investors buying Lightspeed at 23x and 47x estimated 2022 sales and gross profit are "failing to see the titanic competitive shifts happening in its business and industry," Spruce Point observes. 
  • The company will "increasingly compete against industry stalwart Shopify Inc SHOP, and new entrants such as Amazon.com Inc AMZN," it adds. 
  • Price Action: LSPD shares closed lower by 12.16% at $98.77 on Wednesday.
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