SINGAPORE (May 14): Wong Ngit Liong, chairman and CEO of Venture Corp, does not appear to be taking seriously claims that earnings momentum at his company is in jeopardy. “Do these people have the guts to show their face?” he reportedly grumbled during Venture’s recent results briefing. “Don’t listen to rumours.”

 Yet, it is hard for investors to ignore the fact that shares in Venture plunged 32.6% within three weeks, to hit a low of $19.42 on May 2. This came in the wake of a short sale of over one million shares in Venture that was executed on April 20. Then, on April 24, a group calling itself Valiant Varriors said in a blog post that Venture was being affected by weakening sales of smokeless cigarette devices produced by Philip Morris International.

According to Valiant Varriors, about 30% of Venture’s revenue comes from Philip Morris’ so-called I Quit Ordinary Smoking (iQOS) devices. This alone might have surprised analysts and investors. Venture often emphasises that it has a diversified customer base. For instance, on Nov 3, 2017, at its 3QFY2017 results briefing, Wong said Venture had 180 active customers. The closest it has come to flagging over-reliance on any customer is a note in its annual reports from 2013 to 2017 that a single customer contributes more than 10% of its revenue. It is unclear whether it is referring to the same customer for each of those years.

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