WANdisco share trading stopped as potential sales fraud discovered
Cash position uncertain with large fy2022 revenue drop likely
Significant, sophisticated and potentially fraudulent irregularities concerning purchase orders, revenue and bookings have discovered at WANdisco, causing trading in its shares in the AIM exchange to be suspended.
The company supplies Data Activation Platform software which moves data can be moved from edge environments to data centers and multiple public clouds for analysis and other processing using commit-to-consume contracts. It had been recently valued at $1 billion and was considering a dual-listing for its shares in the UK and the USA.
WANdisco has been in bullish form and, with apparent rapid growth in 2022 it expected preliminary unaudited revenues for fy22 to be no less than $24 million (229 percent year-on-year growth) and said fy22 bookings grew 967 percent to $127 million. It was noted in January that a number of the one-off migration contracts won during 2022 had the potential to expand into commit-to-consume contracts during 2023. WANdisco ended the period with a strong balance sheet, approximately $19 million cash and $44 million in trade receivables. Together with an RPO of $110 million, that could see the company through to profitability.
That may now no longer be true. WANdisco has just issued a statement saying: “The Board now expects that anticipated fy22 revenue could be as low as $9 million and not $24 million as previously reported. In addition, the Company has no confidence in its announced fy22 bookings expectations.”
The potential fraud has been discovered following investigations by CFO Erik Miller and CEO Dave Richards. The company’s statement said the irregularities were: “represented by one senior sales employee” and “give rise to a potential material mis-statement of the Company's financial position.”
No sales semployee has been identified. WANdisco’s chief revenue officer is SVP global sales Frank Moser, promoted to the role in January this year. Moser joined WANdisco in May 2021 as Sales Director for continental Europe. Richard Baker is the SVP for EMEA/global sales, appointed in May 2022 after a year as VP Sales for EMEA and APAC. No sales head is listed on WANdisco’s leadership webpage.
Irregularities potentially causing a change in full year revenues from $24 million to $9 million; a $15 million drop, must have involved major sales accounts.
WANdisco’s statement warned that the Company's cash position has been impacted and there are “significant going concern issues.” That’s longhand for saying it could run out of cash. The company is conducting “an investigation with its external legal and professional advisers into the nature of this activity and its true financial position.”
If the company actually finds that 62.5 percent of its fy2022 revenues, $15 million, has gone missing, then it could need major surgery to get it back on a regular footing.