The co—head of Dutch payment processing company Adyen NV ruled out a share buyback one day after its earnings triggered a stock meltdown that erased more than €18 billion ($20 billion) of its market value.
(Bloomberg) — The co—head of Dutch payment processing company Adyen NV ruled out a share buyback one day after its earnings triggered a stock meltdown that erased more than €18 billion ($20 billion) of its market value.
“We’re focused on building a business and we always had a policy where we continue to invest our funds in the business,” Ingo Uytdehaage, Adyen’s co-chief executive officer said in an interview on Friday. “And that’s what we continue to do.”
The company’s shares closed 39% down on Thursday after its first-half results missed analyst estimates at pretty much every level. Aggressive competition in North America contributed to the slowest revenue growth since the company went public in 2018, something few had bargained for.
“It’s certainly not a reaction that we expected,” Uytdehaage said. “It’s clear that we lost some trust yesterday and I think the best approach to this is now very carefully listening to our investors and see how we can get back some of that trust.”
“The markets are always right,” Uytdehaage added. “That’s the best approach I can take to it.”
Adyen has been a reliable growth stock, with revenue rising by at least 26% in every half since its listing in 2018 until the latest period. The disappointing results, which were also hurt by inflation and rising interest rates, suggest maintaining such momentum will be a challenge.
The company’s results on Thursday were a “dangerous mix of uncertain growth and higher costs,” Bryan Garnier analyst Paul Charpentier wrote in a note on Friday.
Net sales rose 21% to €739.1 million in first half of the year, compared to an estimate of €776.5 million in a Bloomberg survey of analysts.
The Amsterdam-headquartered fintech company has a planned investor roadshow that starts next week. Once it gets feedback from its investors, Uytdehaage said “we will also rethink our actions.”
Read More: Adyen Plummets as Sales Miss Erases $20 Billion of Market Value
Shares extended their losses on Friday as several analysts downgraded their rating on the stock.
(Updates to add details in seventh and ninth paragraph. A previous version corrects spelling of company name in first paragraph.)
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