Emulex Recovers Most of Lost Ground After Hoax-Driven Collapse

(Updated from 2:25 p.m. EDT)

Emulex (EMLX Quote) plunged 57% Friday on what the company says was a hoax press release, but the stock mostly recovered its losses soon after reopening following Emulex efforts to set the record straight.

The stock reopened around 1:30 p.m., some three hours after the hoax started showing up in financial news reports. The hoax temporarily wiped more than $2 billion off the stock's market capitalization, leaving it at around $2 billion during the halt. But since reopening, Emulex has regained most of its lost ground. It ended down 7 5/16, or 6.5%, to 105 3/4, valuing the company at $3.8 billion.

The release, which appeared on the Internet around the time of the market's opening bell, claimed Emulex would restate fourth-quarter earnings to swing to a loss from a profit, and that regulators were probing accounting irregularities. The release also claimed Emulex executives were stepping down. The company, based in California, vehemently disavowed the release. ...