The stock market is easily spooked by suggestions that something’s awry with IT companies’ accounting. That puts a high premium on management credibility in this sector.
Consider Darktrace Plc as the MBA case study on the topic.
US hedge fund Quintessential Capital Management recently raised questions about the Cambridge-based cybersecurity firm’s accounts and said it had a short position. Imagine you’re a fund manager considering the stock for your portfolio. If you don’t buy, and Darktrace doubles in value tomorrow, no one will criticize you for being cautious and missing out. But if you do, and the shares slide, good luck explaining yourself.
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