There’s been a touch of Icarus about the experience of Darktrace since it listed in London at 250p in April 2021.
An IPO which was priced to go amid concerns over the company’s links with controversial entrepreneur Mike Lynch gave way to a huge advance for Darktrace as it made its first steps as a public company.
“But having peaked at more than £10 just a matter of weeks ago the shares are now only a little more than half that level,” said AJ Bell’s Russ Mould.
“The initial catalyst for the tumble was a research note from stockbroker Peel Hunt which told clients to sell the shares and set a price target at 473p.
“Some observers scoffed at such an aggressively negative target at the time but they’re not scoffing now as one of the company’s largest shareholders gets set to sell a third of their stake following the end of their lock-up period.
“The concern will be that other major shareholders will follow suit, piling further pressure on the share price.
“Investors will need to decide if these are just teething pains or if there are genuine questions about the credibility of the company’s artificial intelligence-based technology.
“Those who remain believers in the underlying story will probably be able to dismiss the recent volatility in Darktrace as noise for now, however the longer the shares keep falling, the more difficult it will be to tune out.”