NEW YORK Hedge fund manager Zack Buckley made the case against data analytics company Splunk Inc (SPLK.O), sending the recently public company's shares falling on Monday.
Buckley, who said he is shorting Splunk shares, told the 8th Annual Value Investing Congress that Splunk has an "undifferentiated product," faces a potential pricing war and is seeing heavy selling from insiders.
Splunk, which listed its shares in April, faces the expiry of a lockup on insider sales in two weeks. Buckley said this could add downward pressure on the stock price, citing similar selling when other recently listed companies faced the same deadline.
Buckley said the stock price could be trading at between $6 and $12 a share in the future, far lower than its current price around $35.
On Monday, after Buckley's remarks, Splunk shares were down 4.3 percent to $35.15 in early afternoon trading on Nasdaq. Back in April, the stock more than doubled in its market debut to $35.48.
Splunk, which counts Bank of America (BAC.N) and Viacom (VIAB.O) among its clients, faces competition from major technology companies like Oracle ORCL.O and IBM (IBM.N) as well as new Silicon Valley startups.
Buckley runs Buckley Capital Partners, a long-short hedge fund in Florida, and was among a small number of fund managers to be invited to present his ideas at the conference. Prominent hedge fund managers Bill Ackman and David Einhorn were due to appear later.