Investors dump Blinkx shares after critical blog Blinkx was spun out of Autonomy, the computer software company founded by Mike Lynch Blinkx, the online video search company spun out of Mike Lynch's Autonomy, lost a third of its market value on Thursday after a Harvard academic published a blog alleging it used questionable tactics to boost advertising revenue. Shares in London-listed Blinkx closed down 33 per cent at 117p, having lost almost 50 per cent of their value earlier in the session. Blinkx was spun out of Autonomy, the computer software company founded by Mr Lynch, in 2007 via an initial public offering on London's Alternative Investment Market. As of September last year, Mr Lynch, who sold Autonomy to US technology group HP in 2011, was Blinkx's fourth largest shareholder with a 4.9 per cent personal stake, according to regulatory filings. The Serious Fraud Office is investigating claims by HP that Autonomy falsely inflated its financial performance before the £7.1bn acquisition. Mr Lynch has strongly denied wrongdoing. The Blinkx share price collapse plays into the hands of hedge funds who have placed big bets against it. About 16 per cent of the company's shares are out on loan to shortsellers, according to Markit, up from just 3 per cent in November. Analysts and investors said the collapse in the share price was prompted by allegations in an online article by Benjamin Edelman, an associate professor at HBS and an expert on internet advertising. In the article, published on Tuesday but circulated widely on Thursday, Mr Edelman noted that Blinkx's revenue per employee is twice that of competitors. He raised questions about the way it generates traffic for its content and its links to two adware companies, Zango and AdOn. Mr Edelman wrote that he "prepared a portion of this article at the request of a client that prefers not to be listed by name." Blinkx said in a statement that it "strongly refutes the assertions made and conclusions drawn in the blog post." It added: "The company confirms there has been no material change to the operational and financial performance or outlook for the business, and that fiscal Q3 trading was in line with management expectations." As the blog circulated, investors appear to have taken fright. Richard Holway, chairman of research group TechMarketView, said: "I was a Blinkx shareholder up until this morning, but I saw the blog post and I immediately sold." He disposed of his approximately £15,000 stake, he said, because of Mr Edelman's criticisms of the company. Arun George, technology analyst at Canaccord Genuity, agreed that Mr Edelman's article was the trigger for the sell-off in Blinkx shares. "Clearly this guy is academic and has done some quite in-depth research," Mr George said. However, Blinkx's house broker, Citigroup, said in a note: "We view this as a significant overreaction. We see no reason to think our numbers are unsound. . .We think this is a significant buying opportunity but at the same time acknowledge that until the company rebuts these claims, trading could be volatile. Earlier this month Blinkx's 36-year-old founder, Suranga Chandratillake, moved back to the UK after ten years in Silicon Valley to join venture capital firm Balderton Partners. He retained his role as chief strategist at Blinkx. Between last June and early January, Mr Chandratillake made £2.9m from selling Blinkx shares, most of which he acquired through the exercise of options.