Did AremisSoft Really Get a $37.5 Million Contract From Bulgaria?

This column was originally published May 16 at 4:33 p.m. EDT

For the better part of a year and a half, AremisSoft (AREM Quote), a highly acquisitive, $123 million enterprise software company, has been bragging about a $37.5 million contract with the Bulgarian Ministry of Health "to automate" Bulgaria's health care system. But is the $37.5 million contract really worth just $3.75 million? According to government officials in Bulgaria and an official with the World Bank, which is funding the project: Yes.

This is just the latest in the evolving saga of AremisSoft, which has been the focus of a growing number of shorts-sellers, all of whom share the concern that something doesn't appear to add up.

The company responded today, issuing a press release blasting the "circulation of a specious anonymous 'short report' and other spurious and unsubstantiated rumors the company believes are being disseminated by short-sellers in an apparent attempt to create fear and uncertainty in the company's shareholder base and to depress the price of the company's shares." That follows a press release yesterday that heralded the purchase of stock by one of AremisSoft's two CEOs. That,in turn, coincided with a 13D filing by one-time raider Irwin L. Jacobs, indicating he had accumulated options to purchase 5.76% of the company. At the same time, a William Blair analyst decided to downgrade the stock to "not rated" because she couldn't get a firm handle on the conflicting information she has been hearing. ...