top of page

Short-seller doubles down on Seek

Shares in Seek, avoided a second day of hefty falls after activist short-seller Blue Orca took a second shot at the online jobs platform. After dropping 6 per cent on Friday, Seek recovered from a 7 per cent fall on Monday to close out the session less than 1 per cent lower, at $21.33.

Blue Orca, who successfully targeted Quintis and Blue Sky, released a report on Thursday morning which said SEEK's Chinese online recruiting platform, Zhaopin, was "rotten" and inundated "with fake postings by companies. By lunchtime Seek called for a pause in trading, followed up by a trading halt at the end of the day, pending a response to the attack.

Seek's response released on Monday, was emphatic. "The report contains many inaccurate statements and makes allegations of a very serious nature that are unsubstantiated." Seeks believes Blue Orca's goal is to generate publicity and a public debate, "consistent with the usual practice of short-seller firms." Seek backed the completeness of its market disclosures, reiterating its compliance with continuous disclosure obligations and its view on the company's long-term outlook.

In a follow up to Seek's response, Blue Orca released a second shot, specifically targeting Seek's use of cash. Particularly how Seek reconciled the cash-generative qualities of Zhaopin with the apparent increase in its borrowings. "Zhaopin’s debts increased by 10 [times] during a five-year period in which, according to Seek, Zhaopin had more than enough idle cash sitting around to run its business,"

Blue Orca also noted, Zhaopin has removed 64 of the 66 employers on its platforms that the short seller identified as likely fake, "which we believe is a clear validation of our work".

Blue Orca said Seek's shares could be worth as little as $7.20.

bottom of page