Spruce Point Says Verint Systems Has 60-70% Downside Risk, Company Calls Short Report 'Deliberately Misleading'

New York based investment firm and short seller Spruce Point Capital Management issued a Strong Sell rating Thursday on the analytics company Verint Systems Inc. (NASDAQ: VRNT).

Verint faces 60-70 percent downside risk to approximately $17 to $25 per share due to what Spruce Point said is the market's misunderstanding of the company's flat-to-negative organic sales growth.

The metric is "obfuscated by frequent M&A, a 'beat-and-raise cookie jar' and aggressive accounting measures," according to Spruce Point's announcement.

Verint responded to the short report Thursday with a statement that called it "self-serving" and said it's "inaccurate ... deliberately misleading and is intended to destroy shareholder value."

Spruce Point said the market is valuing Verint like a high-growth SaaS company when it is in fact a slow-growing call center software provider.

Verint shares were down more than 10 percent at $55 at the time of publication Thursday.

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