Hedge funds have significantly ramped up their bets against embattled logistics software group WiseTech Global, following reports of a potential Australian Federal Police (AFP) investigation into its billionaire founder, Richard White. WiseTech Global is an international logistics software group, providing software solutions to the logistics industry globally. The company experienced a loss of over $2 billion from its market value on Monday after allegations surfaced that Mr White was being investigated over claims related to exploiting a woman’s immigration status, further accelerating a year-long slump in its share price.
The news prompted a fresh wave of short-selling activity. Data from Bell Potter strategist Richard Coppleson revealed approximately 1.5 million WiseTech shares were sold short on Tuesday, accounting for 22 per cent of the day’s trading volume. WiseTech Global responded on Tuesday, stating Mr White had assured the board he was unaware of any police investigation into the allegations and “emphatically and unequivocally” denied any involvement in human trafficking. Short interest in the stock has surged from 1.2 per cent last June to a record high of over 8 per cent by mid-last month, a figure that has quickly rebounded after a brief dip.
Concerns surrounding Mr White’s personal life have long worried WiseTech investors. He previously stepped down from executive duties last year amidst a conduct review, returning as executive chairman in February. Separately, Mr White is also under investigation by the Australian Securities and Investments Commission (ASIC) over share trades valued at more than $200 million made during a company blackout period. This ongoing turmoil has seen major fund managers, including AustralianSuper, divest from the company, while rival super fund HESTA expressed deep concern over the latest allegations. Morningstar has warned it could cut its fair-value estimate for WiseTech shares by up to 20 per cent if Mr White were forced to leave, viewing him as instrumental to the company’s success.
