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Darktrace has suffered a second share crash in just over a week as traders braced for a potential wave of sales from major investors.
Shares in one of Britain’s biggest technology companies fell by 15pc in anticipation of insiders including Mike Lynch, the former Autonomy chief executive, being freed to sell their holdings when a 180-day lock-up expires tomorrow on Wednesday.
The company’s value had fallen by more than a fifth on Monday last week after analysts had said Darktrace was overvalued in a blow that came just days before it entered the FTSE 100.
Yesterday (Mon’s) share price drop means that Darktrace has now lost 28pc of its value since the start of last week in a £1.8bn blow to its market capitalisation.
The company had enjoyed one of the most successful major floats of the year, with shares almost quadrupling since its April listing. Although they remain well over double their float price, Darktrace now sits towards the bottom of the FTSE 100 after its reversal in fortunes.
It came as allegations against Mr Lynch in the US took a new twist, with two key witnesses for the US government’s fraud case accused of colluding to drive down its share price.
Former Autonomy executive Stephen Chamberlain, who is charged alongside Mr Lynch over Autonomy’s 2011 sale to Hewlett-Packard, said former City analysts Daud Khan and Paul Morland had carried out ethical breaches and potential illegal behaviour.
Mr Lynch, whose venture capital firm Invoke was an early investor in Darktrace and who once sat on its board, has a stake in Darktrace worth about £760m, owned by him and his wife Angela Bacares.
Other Invoke partners, as well as major investors KKR and Summit Partners, will be cleared to sell on Wednesday, with employees having to wait until a year after the float.
Darktrace has previously warned that the end of the lock-up could send shares lower.
Mr Lynch has no executive role at Darktrace and is not involved in its day-to-day running, although the company has warned that allegations against him in the US could create “reputational risk”.
The 56-year-old was charged with fraud in 2018 alongside Mr Chamberlain, a former finance director and Darktrace’s one-time chief operating officer, over Autonomy’s £7bn sale to HP in 2011.
Mr Lynch denies the charges and is fighting extradition to the US, with Priti Patel, the Home Secretary, due to make a decision on the matter later this month.
Mr Chamberlain, who has pleaded not guilty, on Monday accused Mr Khan and Mr Morland, analysts at JP Morgan and Peel Hunt before Autonomy’s acquisition, of improperly sharing confidential information and working with short-sellers who would benefit from Autonomy’s share price falling.
His lawyers presented JP Morgan emails, claiming they showed Mr Khan had compared Mr Lynch to Hitler, boasted about being “like an AK 47” and predicting that Autonomy’s failure would be his “ticket” to success.
In a Bloomberg chat with a short-seller, Mr Khan wrote: “I am maybe being too hopeful but I can see an image of a Hitler moment for Mike [Lynch], where his generals tell him the war is lost and that he has to step down.”
Mr Chamberlain is seeking to force the court to obtain more emails, in an attempt to challenge the analysts, possible witnesses for US prosecutors.
Mr Khan and Mr Morland did not reply to requests for comment.