Tyro had a day out today after refuting the various claims made in a short seller report released on Friday. As mentioned in a few reports of late, Tyro’s payments systems have been plagued with issues over the past few weeks causing, in their words, around 20% of terminals to be offline. The short seller report came up with a number closer to 50%, along with a number of other issues including that the fault fell on Tyro’s software update, there was a lack of communication with users, that Tyro caused issues with Westfield gift cards as well as claims Tyro was using deposits to support business cashflows.
Tyro was out strongly rebutting each of the points made in a reasonably succinct update. They also expect all terminals up and running again by weeks end. They certainly won this round, and the short squeeze helped the stock recover at least last week’s selling, but the dance is unlikely to end there. The hit to reputation will be significant, and Tyro tends to work without lock-in contracts so impacted users likely would have switched to competitors such as US listed Square. We like Tyro still though, backing it to do well out of the corner. It’s in a similar spot to Seek (SEK) a few months ago when it came under fire from short sellers, now the stock is trading around 25% higher. TYR added +25%
