Montreal-based payment systems maker Nuvei (NVEI) may face a significant long-term downside of up to 50% due to its association with the bankrupt crypto exchange FTX, according to a report released by Spruce Point Capital Management on Tuesday. Nuvei partnered with FTX in December 2021 to offer users ways to receive instant payments for buying cryptocurrencies more quickly and securely. Spruce Point alleges that Nuvei may have been an investor in FTX and failed to disclose its full interest while announcing the partnership. Nuvei shares initially fell by 6% after the report’s release but had rebounded into positive territory at press time. Nuvei has not yet commented on the matter.
Spruce Point also pointed out that Nuvei recently hired Adam Cole, the former global head of payments at FTX, as a senior vice president. The report claimed that Cole had advised multiple defunct companies with ties to known stock promoters and a list of unsavory allegations.
Nuvei recorded $19.2 million in crypto-related revenue in the fourth quarter of 2022, down 58% from the same period a year earlier.
The report by Spruce Point Capital Management has raised concerns about Nuvei’s association with FTX and its lack of transparency in disclosing its full interest in the partnership. The report alleges that Nuvei may have been an investor in FTX, which has now filed for bankruptcy. Nuvei’s shares fell by 6% immediately after the report’s release, but they have since rebounded. Nuvei has not yet commented on the matter.
Spruce Point also highlighted Nuvei’s recent hiring of Adam Cole, the former global head of payments at FTX, as a senior vice president. The report claimed that Cole had advised multiple defunct companies with ties to known stock promoters and a list of unsavory allegations. Nuvei’s revenue from crypto-related activities has also declined by 58% in the fourth quarter of 2022 compared to the same period a year earlier.
The allegations against Nuvei are likely to raise concerns among investors about the company’s association with FTX and its lack of transparency. Nuvei’s shares may face a long-term downside of up to 50% due to the association with the bankrupt crypto exchange, according to the report by Spruce Point Capital Management. Nuvei has not yet responded to the allegations.
The hiring of Adam Cole, the former global head of payments at FTX, by Nuvei has also raised concerns. The report by Spruce Point Capital Management has alleged that Cole advised multiple defunct companies with ties to known stock promoters and a list of unsavory allegations. Nuvei’s revenue from crypto-related activities has declined by 58% in the fourth quarter of 2022 compared to the same period a year earlier.
Investors will be closely watching Nuvei’s response to the allegations made by Spruce Point Capital Management. The lack of transparency in disclosing its full interest in the FTX partnership could impact Nuvei’s reputation among investors. Nuvei’s shares may face a long-term downside of up to 50% due to its association with the bankrupt crypto exchange.
