On March 7, 2013, after the market closed, Maxwell issued a press release disclosing that the Company would be restating previously issued financial statements for 2011 and most of 2012 due to errors related to the timing of recognition of revenue from sales to certain distributors. Specifically, the Company announced: (a) Maxwell had overstated its revenues and earnings in 2011 and 2012 and the financial statements should no longer be relied upon; (b) Maxwell had reported revenues prior to the time the sales price was fixed and/or collection was reasonably assured; (c) Maxwell's internal accounting controls were deficient and permitted the premature recognition of revenue, leading to materially misstated financial results; and (d) as a result of the above, the Company's financial statements may be materially false and misleading at all relevant times.
The Company further disclosed that the financial statements should no longer be relied upon, and that as a result of the investigation, certain employees were terminated and Maxwell's Sr. Vice President of Sales and Marketing resigned. On this news, the Company's stock price dropped $1.01 per share on March 8, 2013 to close at $8.10 per share, a one-day decline of 11% on volume of 1.7 million shares. The stock price has continued on a steady decline, over the past four weeks, losing $2.83 per share or 35% to close on April 10, 2013 at $5.27.
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