Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
“Hey James , team and subscribers HNY to all. I’d appreciate your views on Tyro - as you are aware the price has fallen approx. 30% in the last week on system failures, and a critical report from a short seller. Would you be a buy at this level ? General advice only “ - Cheers David P.
Morning David,
Tyro Payments (TYR) is the 5th largest point of sale terminal provider in Australia (behind the big 4 banks) and over the last 10 days or so has had technical issues with their terminals. They initially said that it impacted around 5% of sales volume however that number was changed to 30% of customers. The issues are yet to be resolved and the backlash from aggravated customers has been understandably big. I was actually at a restaurant on Saturday and the Tyro machine was done.
It seems from all reports that Tyro is not handling the outage well and is struggling massively with the size of the issue. Tyro have built a very successful business largely undercutting the major banks on fees, however their systems are not copping, and the outage has the potential to impact the business in the long term, by losing customers now but also impacting future sales. On Friday a short report was issued by a firm called Viceroy. These guys are purposefully opaque however they’re short the stock and say they’ve done considerable research into what’s actually going on. We view this as a major issue for Tyro (TYR) and would not be stepping up and buying the weakness.
The companies response comes out today and it might take a while for investors to make a decision but it feels a bit too hard for MM at the moment.
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