The short-sellers around Viceroy Research and Fraser Perring have a new target: Hexagon AB, a multinational technology group for metrology and geoanalytics controlled by Melker Schörling, the majority shareholder and determining voting shareholder. In new research, Viceroy Research concludes that Hexagon is run by a “corporate dictatorship.” Moreover, Viceroy believes management has committed fraud.
However, the Hexagon share was relatively unimpressed by the short-seller attack, dropped slightly after the Viceroy report was published on 19 July 2023, but has since risen slightly. It is currently (21 July 2023, 3 pm Berlin time) quoted at SEK 113.6.
The role of Melker-appointed chairman and former Hexagon CEO Ola Rollén also raises questions. It is alleged that he is making investments through an investment vehicle involving Schörling and Hexagon‘s senior executives that could conflict with those of the company.
Viceroy also has concerns about possible fraud by Hexagon‘s management. The company’s aggressive growth strategy has remained virtually unchanged for 25 years. However, acquisitions passed off as organic growth may fall far short of expectations. Viceroy suspects that management is deliberately misrepresenting here.
In addition, Viceroy Research mentions the aggressive accounting measures and corporate structure decisions that would mask the company’s true performance. Poor disclosure of information could be seen as an attempt to keep critics at arm’s length.
Therefore, Fraser Perring and Viceroy Research are going short Hexagon.
