The Corporate Travel Management Ltd (ASX: CTD) share price has returned from its trading halt with a bang on Thursday.
In late morning trade the corporate travel specialists' shares are up a sizeable 14% to $22.82 following the release of its response to the second short seller report out of VGI Partners.
Why are its shares storming higher?
Investors appear to have been pleased with the company's decision to draft in EY to provide support, assess certain matters relating to its financial statements for FY 2018, and respond to matters raised by VGI Partners.
Management advised that it did this due to EY's experience in the travel sector as the auditor of Flight Centre Travel Group Ltd (ASX: FLT) and other global travel sector participants.
EY supported all of Corporate Travel Management's responses to this latest attack. This includes concerns that the company's North American segment was vulnerable to write-downs, the quality of its audited financial position and working capital, and the lack of interest income on its cash balance.
The multinational professional services firm labelled VGI's report as "superficial".
What now?
Corporate Travel Management has warned investors that this may not be the end of the story.
It said: "VGI may continue to make mischievous and misleading claims about issues that CTM believes have no consequence for the financial performance of the business and execution of CTM's successful business model."
However, it reassured shareholders that: "The Board will continue to ensure shareholders are fully informed about the fundamental performance of the business and does not intend to have the business distracted by baseless and selfserving claims."
Overall, I think Corporate Travel Management has handled this situation very well, especially in comparison to fellow short seller targets Blue Sky Alternative Investments Ltd (ASX: BLA) and Retail Food Group Limited (ASX: RFG).
Should you invest?
While I'm optimistic that VGI Partners won't be able to come back with anything new and believe Corporate Travel Management is a quality share trading at a great price, I intend to sit this one out until the dust settles.
