December 1, 2021

Darktrace shares plunge again as investor lock-up ends

Shares dive by 13% as analysts raise doubts over cybersecurity firm’s valuation

Shares in the cybersecurity firm Darktrace have plummeted again after an analyst note raising doubts about its valuation and as the expiry looms of a lock-up on insiders selling their stakes. The Cambridge-based firm, which had been a star performer since floating in April and joining the FTSE 100 last week, had a share price fall of more than 13% to 698p in early trading on Monday, valuing the company at £4.8bn.

Its shares first began to dive last week after an analyst note from Peel Hunt questioned its sky-high valuation. Darktrace, which uses artificial intelligence to create digital security products to keep businesses one step ahead of hackers and viruses, has lost £2bn from its market capitalisation within a week. The company’s shares had come close to hitting 1,000p in recent weeks, valuing the business at nearly £7bn, quadruple the 250p it began trading at when it made its debut on the London Stock Exchange.

Darktrace’s latest share price fall – the largest in the FTSE 100 – comes as a 180-day lock on investors who were onboard at the flotation selling their shares ends on Wednesday. Investors who could offload stakes include the British tech billionaire Mike Lynch, Darktrace’s first and largest shareholder pre-float, who sold the software group Autonomy to Hewlett-Packard for £8.4bn in 2011.