Amdocs is once again under the seller’s short attack

Last week, the stock price of Amdocs Ltd. (Nasdaq: DOX) to an all-time high. The peak was short-lived: On Wednesday of this week, the price was down 11.2% due to particularly high trading volume, after a negative report from an organization called Jehoshaphat Research filed claims for inflated earnings numbers in Amdocs and described its shares as “uninvestable”. Amdocs’ market cap decreased to $ 9.2 billion. The company headed by Shoki Schaeffer provides systems and solutions to telecom companies. For Amdocs investors, this week’s events may have reminded us of something similar that happened in early 2019, when Ben Axler of short selling firm Spruce Point Capital made a “strong sell” recommendation to Amdocs, estimating that its share price would fall below its price. . Then the level is $ 60 to $ 30- $ 45. Spruce Point Capital’s recommendation led to a reduction in the stock price of Amdocs in the short term, and after a year the stock was already trading at around $ 45, which is the price it fell to when the repercussions of the Coronavirus pandemic hit the US stock market in general, but since then and then it rose again And, as we mentioned, it hit record highs last week. Now, Jehoshaphat Research issued a negative recommendation that has pushed Amdocs down. It claims Amdocs’ profits have been inflated by 40-50%, a claim that is based on comparing the profitability of the company’s subsidiaries with the combined earnings of the parent company. “How can you turn declining revenues into growing revenues? Send them to AMDOC’s headquarters in Israel,” the report said. Its authors say they spoke to a former US Amdocs employee who told them he saw a significant drop in revenue from major US customers (AT&T, T-Mobile, Sprint), about 7% annually. The report says Amdocs has been able to partially compensate for this by winning contracts in other parts of the world, but projects in Europe and Latin America were 15-20% less profitable than projects in the United States. The authors say they asked the former employee how Amdocs could deliver the growth, and were astonished by his response. “That’s the million dollar question. In 2016 and onwards, I stopped being able to understand what Amdocs was bringing to Wall Street. I used to be able to see the relationship between our numbers in North America and what Amdocs would write in North America, until 2016, from That moment onward until my departure, the numbers did not match what we were sending to the headquarters. We will independently calculate our performance for the quarter and report it to the headquarters of AMDOCS in Israel, it will not be so it will be good; it will be in decline. But then, when AMDOCS offers Its quarterly numbers go to Wall Street, North America is going to grow somehow. This surprised me every three months. ”Related articles Amdocs in talks to transfer IP to Israel Amdocs buys 5G cloud tech co Openet for $ 180 million. The accusations are serious, and Amdocs vigorously rejects them. “The report contains imprecise data, unfounded allegations, and speculation designed to push the share price down to serve the interests of short sellers at the expense of Amdocs shareholders. We remain fully confident in our accounting and business practices. We caution shareholders against making the investment based on this. This report. “Amdocs generated record revenues of over $ 4.2 billion for the full fiscal year 2020, with fixed operating margins that are not GAAP-compliant. Our financial outlook remains strong … We continue to communicate directly with our investors regarding the seller’s short report and will provide more detailed information next week, ”said Amdox. Sources close to the company are raising more questions about the report. They say extensive checks have not found any homes. An investment, company, or other entity called Jehoshaphat, and that the Jehoshaphat web domain was created just a week ago. They also say that there are indications that the Twitter account that is now opened is under restriction (possibly suspected or fraudulent). 2021 (through December 31, 2020), Amdocs announced total revenue of $ 1.1 billion, an increase of $ 33 million over the previous quarter. Non-GAAP net profit reached $ 153 million, an increase of 6% in the corresponding quarter of 2020 Recently, Globes reported that AMDOCS is in talks with the Israel Tax Authority regarding transferring all its intellectual property to Israel in exchange for taxes B. Billions of shekels expenditures Published by Globes, Israel business news – en.globes.co.il – at 1A BRILL 2021 © Copyright Globes Publisher Itonut (1983) Ltd. 2021