Payments fintech Tyro may already be looking forward to 2022 after a tough start to the year, with lawyers threatening a class action against company, nearly 10% left without working payments terminals and instead shifting to square and a short-seller targeting the business.
But investors are sticking by Tyro (ASX:TYR) with its share price soaring 25% today after returning from a two-day self-imposed trading halt, following a three-page rebuttal of the short-seller report by Viceroy Research. Tyro ended the day up 58 cents at $2.90.
The US-based short-seller said: “Tyro is the most underwhelming fintech in the ASX”, claiming that up to 50% of terminals weren’t working.
The fintech has rejected 10 points in the Viceroy report as “completely false”.
Tryo asked for a trading halt last Friday after its share price fell 12% following the release of the short-seller report. Trade resumed on Tuesday morning after the company released its response.
Shares had already falling around 30% after a software upgrade in the first week of January began to cause problems with Tyro terminals. The company notified the market about the issue on January 7. Two weeks later, 9% of merchants using Tyro still have no functional terminals – an improvement on 19% on January 13, while 6% have at lease one working terminal and 85% have all terminals working – that figure was 70% a week ago.
Last week the fintech said the problem existed in some versions of the terminal platform software installed on Tyro’s Worldline terminals.
This issue caused a subset of those terminals to lose connectivity with Tyro’s network meaning they could neither transact nor be updated remotely. For the avoidance of doubt, the issue is contained and at no time was the security of the terminals nor merchant data compromised,” the company said.
The company said was collecting, repairing, and returning the problem terminals.
Meanwhile, many Tyro users have taken to social media to express their frustration and say they’ve turned to the big four banks or US payments platform Square for a solution.
@Tyro outage: DAY 7.
— Shane Whitely (@newsheli) January 11, 2021
The company, which releases weekly transaction value figures, nonetheless has seen transaction figure increased on 12 months ago, with January 2021’s figures to date up 9% to $13.17 billion.
This morning Tyro said the Viceroy report: “follows a familiar playbook used by overseas domiciled and unregistered operators seeking to generate uncertainty, so as to directly profit from or facilitate others to profit from their research”, adding that it continues to be in compliance with its continuous disclosure obligations.
“Tyro remains fully focused on bringing its impacted merchants back online as rapidly as possible and to provide all assistance it can to minimise the disruption caused,” the company said.
In its statement to the ASX, Tyro said that it received correspondence from a law firm on Monday that it was investigating a potential class action against the company, but no proceedings had commenced.
- Editor’s note: On Jan 20, $TYR fell nearly 8% to $2.67.