Controversial tech group GetSwift has landed in hot water with the stock exchange after an undisclosed 'strategic partnership' in Kuwait appears to have sent its shares soaring by 20 per cent on Tuesday.
The last mile logistics operator faces a shareholder class action and is being sued by ASIC after allegedly misleading the market by not revealing in 2017 that half the customer contracts it had boasted did not generate a cent of revenue. Now, it appears to be in trouble with another corporate regulator for the opposite reason: failing to disclose a 'strategic partnership' in the Middle East nation.
The Australian Securities Exchange (ASX) suspended GetSwift from trading on Tuesday after its shares rocketed as much as 20 per cent on high turnover.
"ASX observed some unusual trading and share price movement in GetSwift Limited (GSW) securities following this morning’s open," said a spokeswoman for the sharemarket regulator. "Trading was suspended at 12.07pm, pending a response by the company to ASX’s price query."
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Shares of GetSwift, which was founded by former AFL player Joel Macdonald, were up 19 per cent to 19¢ when trading was suspended. GetSwift has yet to respond to the ASX query.
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Earlier Tuesday morning, a press release distributed on trading terminal Bloomberg announced that GetSwift had firmed up a "strategic partnership" in Kuwait with The Kout Food Group, which operates the local franchises for Pizza Hut, Taco Bell, and Burger King.
Kout, which also has operations in the UK, announced that it will be deploying the GetSwift platform across the delivery segment of these, and other brands it operates.
In the press release, Kout's deputy chief executive Amin Mohamed, described the GetSwift solution as "best in class" and said "we have recommended and suggested GSW solution to partners around the globe and this could be their preferred solution."
GetSwift chief executive Bane Hunter acknowledged the importance of this contract win.
“Although this has been a lengthier journey than expected, we are honoured and humbled by the trust and faith our partners at Kout Food Group have given us during a period of time that was challenging for GSW due to external pressures," he said in the press release.
"We look forward to the next chapter in our global story.”
The press release was not disclosed on the ASX, and did not contain any financial details or the length of contract. GetSwift did not respond to requests for clarification from The Sydney Morning Herald and The Age.
GetSwift is trying to convince the market it has a viable business model. Prior to Tuesday's share spike the company had a market value of just $30 million, despite holding $74 million cash and no debt.
Last month the company reported that its revenue for the March quarter exceeded $1 million, up more than 200 per cent compared to the prior March quarter.
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The shareholder class action and ASIC legal action relate to allegedly misleading statements the company made to the market in 2017 about customer contracts with the Fruit Box, Commonwealth Bank and Amazon.
The stock crashed from $2.92 to a low of 98¢ after the company revealed that fewer than half the contracts it had been publicising were actually generating any revenue.
GetSwift had raised $75 million from investors at $4 a share just months prior to the shock announcement.
GetSwift has said it will vigorously defend itself, and its executives, against the actions. ASIC has also taken action against Mr Macdonald and Mr Hunter.