Shares in payment company Paysafe are getting destroyed after a short seller action

LONDON — Shares in payment processing company Paysafe collapsed over 30% on Tuesday morning after a short seller claimed in a report that the company was at risk of being investigated by the regulator.

Paysafe shares collapsed 32% between 11.00 a.m. GMT (6.00 a.m. ET) and 11.45 a.m. GMT (6.45 a.m. ET), but have since recovered some ground. Here is how shares look an hour later at close to 12.45 a.m. GMT (7.45 a.m. ET):

The slump came after a blog post was published by short seller Spotlight Research accusing the company of breaking the law through operations in Asia that facilitate online gambling. Gambling in China is illegal.

Paysafe declined to immediately comment when contacted by Business Insider.

Paysafe is a payment processor, handling payments on behalf of third parties, and operates online wallets under the brands Neteller and Skrill.

Spotlight makes clear in its blog post that it is “shorting” Paysafe. This is where traders and hedge funds effectively bet that a stock price will fall. Aggressive research and reports have become a popular tactic among short sellers in recent years, famously with London-listed insurance company Quindell which was targeted by Gotham Research.

Learn more:

NOW WATCH: 7 inventors who were killed by their own inventions

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at