What's Going On With Nuvei Shares Tuesday?

Nuvei Corp (NASDAQ: NVEI) shares are facing selling pressure Tuesday after Spruce Point released a strong sell research opinion on the company. 

What Happened: Investment management firm Spruce Point released a bearish report on Nuvei Tuesday morning titled, "Fool Me Once, Twice, Three Times, But Not Four."

The short seller suggested the stock faces between 35% and 50% downside from current levels based on several factors including exposure to FTX. 

Spruce Point said its research shows that Nuvei was likely an investor in FTX. Given that the company is a creditor in FTX's bankruptcy, the firm alleged that Nuvei may have failed to disclose its full interest in FTX. 

Spruce Point also highlighted the company's leveraged acquisition of Paya Holdings, noting that the buyout appears "troubled." The firm believes the acquisition will negatively impact EBITDA margins and cause organic dollar of revenue and EBITDA per dollar of volume to decline by low single digits.

Spruce Point also believes Paya Holdings has not accurately described its customer base. 

"Paya has made multiple drastic revisions to its 'customer' claims, undermining our confidence in their accuracy and indicating extreme embellishment," the short seller wrote in the report. 

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Given Spruce Point's findings, the firm believes Nuvei should be trading in a range of $21.22 to $27.59 per share. At time of publication, the stock was down 1.34% at $41.87, according to Benzinga Pro.

This illustration was generated using artificial intelligence via MidJourney.