SHARES in cybersecurity company Darktrace surged more than 12 per cent yesterday after a fresh analyst note from Berenberg contradicted Peel Hunt's "sell" analysis a fortnight ago and said the subsequent stock price plunge it provoked was driven by "fear not fact".

"Any share price capitulation is a result of fear, not fact," Berenberg analysts including Benjamin May wrote in a new note, after visiting the company's HQ in Cambridge. This was accompanied by a "buy" rating on the FTSE 100 company's stock from the broker, which provides its corporate services to Darktrace.

The share price surge built on an earlier recovery after a filing showed that Darktrace's chairman Gordon Hurst bought 25,000 shares at a premium on Friday.

After regaining some ground, Darktrace's shares now stand at about 32 per cent down from their price on 25 October, before Peel Hunt issued a "sell" rating on the stock, which it suggested was worth only half its value at the time.

"Darktrace's strong marketing engine has been a cause of some controversy, as many felt there was a gap between the promise and reality," the broker said.

This time last week, the company's shares tumbled a further 15 per cent after the end of a lock-up period that prevented insiders offloading their multibillion stakes.

This prompted a stock offload from Vitruvian Partners - its fifth biggest shareholder - which dumped 11m shares at a discount price of 580p, sending the share price down as much as 11 per cent to the bottom of the FTSE 100.

The company has struggled to climb back up ever since, but its current price of 637p per share is still well above its 250p per share price at IPO in April.

(c) 2021 City A.M., source Newspaper