What happened
Shares of Triterras (TRIT -95.75%) popped as much as 17% this morning after the company announced a share-purchase program and provided an update to investors. The company is defending itself from a bearish report released by short sellers. As of 1 p.m. EST, the stock had given up much of those gains and was up just 3%.
So what
Short seller Phase 2 Partners released a report a few days ago alleging that 75% of transactions on Triterras's blockchain-based trading platform Kratos are connected to company executives. Phase 2 Partners says it arrived at this conclusion after mining Ethereum data, and believes that only 6% of clients traded on the platform in November and December after a related company -- Rhodium -- fell into financial distress. Both Triterras and Rhodium were founded by Srinivas Koneru, who currently serves as Triterras's CEO.
Image source: Getty Images.
Triterras says the accusation that "our volumes have demonstrated the precipitous drop alleged in the report is untrue." The platform has 66 traders, and the business remains strong, Triterras fired back. The company also says that it has properly disclosed all related party transactions.
Now what
Triterras asserts that the recent volatility has created an "attractive opportunity" to repurchase shares, so the board has authorized a $50 million buyback program. Koneru had previously announced his attention to purchase Triterras stock in the open market, which had sent the stock higher, and the CEO has so far purchased nearly 170,000 shares based on those intentions.
