DECEMBER 15, 2021 – Viceroy Research is short S&T AG (XTRA:SANT): a roll-up of low-quality, labor intensive “IoT” assets, often acquired under fire-sale circumstances. Analysis of individual subsidiary performance shows flatlining and negative growth due to frauds & federal raids, insolvency, security breaches, and general operational decline.
S&T also appears to hide several subsidiaries in an off-balance sheet structure to conceal corporate fraud. Management have hidden these risks from shareholders and engaged in several undisclosed related-party transactions.
S&T buys low-quality revenues and earnings at fire-sale prices to artificially “boost” value. Most tech acquisitions are made at 0.5x revenues, and complements S&T’s market trading at 1x revenue, generating false “value”.
S&T’s business practices are a red flag, and the company is exposed to huge consequences of criminal indictments internationally.
We believe S&T shares are worth substantially less on preliminary assessment of its ground level businesses. It would be absurd to provide a full valuation of SANT based on the vast off-balance sheet structure of the business and questions surrounding the quality of its earnings.