Ticket Giant Shares Plunge

German ticketing giant CTS Eventim has hit back at a report that triggered a 25 percent drop in its share price, claiming it’s misleading and has drawn investors to inaccurate conclusions.

"The SES report is, to put it mildly, misleading in various respects and arrives at conclusions that are, to say the very least, objectionable," CTS legal and communications chief Rainer Appel told Pollstar, after his company’s stock had fallen from euro 36.28 to 26.55 over the course of a month.

The report, compiled by financial analysts from SES Research and published July 10 under a heading that said "The Completely Wrong Price," advised that CTS stock was a "sell" because the shares were trading at about double what it believed them to be worth.

It was an in-depth and extremely negative analysis of CTS’s trading position and included the view that the high profit margins that have boosted the German ticketing giant’s stock price aren’t sustainable.

The report also said that Klaus-Peter Schulenberg’s historically acquisitive company is running out of room for expansion, and that investors should be wary that its continued period of growth is drawing to an end.

It ran to 51 pages and looked to be an exhaustive investigation into CTS, which owns roughly 50 percent of five of the country’s leading promoters, although Appel seems reluctant to discuss whether such a document could only have been compiled with the help of some insider information.

Nor would he confirm reports that CTS issued a company-wide memo suggesting the SES report was part of a conspiracy to hobble its stock value.

"It is, in fact, not quite clear to us what the motivation behind the SES report could be. SES has never covered our company or shares before, and it is most unusual for a research firm to start coverage of a new company with a report that just bashes the company down in an unseen way and targets their shares at half the price they are actually traded for at the time the report is published," he explained.

"We can therefore not exclude the possibility that the SES report was driven by personal objections or disappointments or probably even by somebody’s personal economic interests.

"We must, anyhow, point out that we are not willing to engage in public speculations about a conspiracy against CTS Eventim on the side of SES or anybody involved in the recent SES report," Appel said.

He preferred to concentrate on another report published July 12 by Bayrische Landesbank, one of the most renowned German banks, which suggested CTS shares should have a price target of euro 42.20.

At the moment, investors seem to be taking more notice of the SES report and voting with their feet.

Appel also said the board’s recent decisions to buy back up to 1 million of its own shares was not a bid to shore up CTS’s value, but was made because – at the reduced price – the directors perceived it to be undervalued and something of a bargain.

"We are confident that we will be able to use the shares bought back as an acquisition currency in the future at a substantially higher valuation," he added.

He said he remains confident, as apparently do the experts at Bayrische Landesbank, that CTS shares will rise back to their mid-July value.