Shift4 Payments short report ‘opportunistically motivated,’ says Stephens

Stephens notes that shares of Shift4 Payments (FOUR) have declined 13% intra-day following a report from activist investor Blue Orca Capital, which disclosed a short position in the stock and alleges a series of aggressive financial maneuvers and strategic initiatives that were "motivated by the CEO/founder’s ownership interest." Like other recent short reports that have targeted the likes of Block (SQ) and Nuvei (NVEI), the report ties events to the CEO’s trading activities in "a series of claims that are difficult to prove or disprove," the firm says. At the center of the allegations are the company’s buyout of third party resellers in the second half of 2022, says Stephens, which believes the rationale behind the third party buyout initiative is "sound and in the best interest of shareholders." The firm acknowledges the short report may create a near-term overhang, but it views the report as "difficult to substantiate and opportunistically motivated." Stephens has an Equal Weight rating and $80 price target on Shift4 shares, which are down $9.22, or 13.5%, to $59.32 approaching midday.