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Noah Zivitz

Managing Editor, BNN Bloomberg

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Nuvei Corp. shares sank Wednesday after a prominent short seller said it was betting against the Montreal-based payment processor.

In an elaborate report, Spruce Point Capital criticized Nuvei management and questioned some of the company’s acquisitions. It also said it believes Nuvei shares could fall as much as 60 per cent.

Currently, 11 analysts have a buy recommendation on the stock, three analysts say it’s a hold, and there are zero sell recommendations among analysts tracked by Bloomberg.

“Nuvei commands a premium valuation to financial technology peers at 15x and 34x 2022E sales and EBITDA, but we believe it should trade at a discount to incorporate our documented concerns,” Spruce Point said in a statement that accompanied its report.

In a statement issued Wednesday evening, Nuvei said it "believes the recent report issued by a short seller is intentionally misleading and draws inaccurate conclusions, innuendo and character attacks on key executives, among numerous other issues." The company also reiterated its financial forecasts. 

After plunging as much as 56 per cent in trading Wednesday, Nuvei’s subordinate voting shares closed the session down 40 per cent to $73.12 on the Toronto Stock Exchange.

Andrew Left’s Citron Research, another firm known for high-profile short calls, said on Twitter Wednesday morning that it was buying Nuvei shares after they became “way oversold” subsequent to Spruce Point’s report.

In third-quarter results released Nov. 9, Nuvei said it swung to a profit as revenue rose 96 per cent year-over-year to US$183.9 million as payments volume rose 88 per cent to US$21.6 billion.

Nuvei went public last year on the Toronto Stock Exchange after an initial public offering in September that raised US$805 million. That offering was led by Goldman Sachs Canada, Credit Suisse Securities (Canada), BMO Capital Markets, and RBC Capital Markets.

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