What happened
Arqit Quantum (ARQQ -1.80%) stock couldn't get over the hump of Hump Day. The next-generation computing specialist's share price tumbled by almost 18% on Wednesday, no thanks to the disclosure of a regulatory investigation and an annual earnings report that was not warmly welcomed by investors.
So what
Arqit, which concentrates on the rather niche field of quantum-safe encryption, booked $20 million in revenue for its fiscal 2022, well up from the $48,000 in the same period last year, although it must be mentioned that the company only started earning revenue in the second half of its fiscal 2021.
As for the bottom line, Arqit's non-IFRS (adjusted) loss before was $52.3 million, notably steeper than the $15.6 million deficit of fiscal 2021.
Few, if any, analysts track Arqit stock, so these results could not be measured against pundit expectations.
Now what
Separately, and more worryingly, The Wall Street Journal reported the company is facing an investigation by the Securities and Exchange Commission (SEC) over the way it came to the stock market. As with many market debuts these days, Arqit became a publicly traded entity through a special purpose acquisition company (SPAC) merger with an entity called Centricus Acquisition Corp.
The nature of the probe wasn't disclosed by the company, although the Journal quoted it as saying that it is cooperating with the regulator.
No one likes to hear about one of their investments being under a regulator's microscope, and they aren't fond of deepening net losses. On one ugly day, Arqit disclosed that it was going through both; no wonder its stock price cratered.
