Corporate Travel Management responds to short seller attack, shares slump more than 20%

The Wolf of Wall Street/ IMDb
  • Corporate Travel Management has rejected the claims made by short-seller VGI Partners.
  • In a response issued this morning, CTD said the VGI report “either misunderstands or misrepresents” its business.
  • CTD shares came out of a trading halt and initially fell almost 30%. A short time ago, they had settled more than 20% lower in afternoon trade.

The ASX-listed Corporate Travel Management (CTD) has responded to a report issued by activist short-seller VGI Partners.

VGI issued a 176-page report over the weekend which criticised CTD’s accounting processes and raised questions about the actual state of its cash-flow.

In issuing the report, VGI announced it held a significant short position in CTD, meaning it will make a profit if CTD’s share price falls.

In its response, CTD rejected the bulk of VGI’s claims about the business.

It said VGI “either misunderstands or misrepresents” CTD’s “financial performance, governance and business model”.

The directors of CTD requested that the company’s shares go into a trading halt for the first two days of this week.

Upon resuming trade this morning, shares in CTD fell by almost 30% at the opening bell before climbing.

By mid-morning, they were around 15% lower, but have since settled more than 20% lower in afternoon trade.


The report rejected VGI’s claims that CTD’s changes to its accounting policy around the recognition of revenue raised questions about the veracity of its income.

The changes related to commission revenue that CTD hadn’t yet received, but where receipt was deemed to be “highly probable” and “reliably measured”, in accordance with accounting standards.

However, CTD said the changes had led to an adjustment of only $500,000, comprising around just 0.4% of the company underlying earnings.

The report also “rejects the claim that a decline in 2H18 cashflows indicates poor revenue quality,” CTD said.

“The movements in cash payments are primarily timing differences. Over time, CTM has consistently delivered at or near 100% cash conversion.”

VGI also conducted site visits to CTD’s overseas offices, which it said often weren’t actually functioning office sites.

CTD said most of the sites were “legacy locations where we are running out existing leases that will not be renewed,” as part of a broader consolidation strategy.

The CTD board said it acknowledged the company had not kept its website updated regarding its global office locations.

The company said it has approached VGI Partners to hold a meeting about the claims made in the report.

CTM held its annual general meeting this morning, where company CEO Jamie Pherous again rejected the claims made by VGI.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.