Symantec Collapses By Most Ever After Admitting Internal Investigation
Symantec collapsed 36% at the open this morning in its biggest single-day drop ever.
During the earnings call last night, the company projected revenue and profit in the current quarter that will fall short of analyst predictions, but most critically, as Bloomberg reports, Symantec also said the audit committee of its board is investigating “concerns raised by a former employee,” and the company’s financial results and guidance could change as a result.
Symantec said it had alerted the U.S. Securities and Exchange Commission and that as a result of the investigation it would delay the filing of its annual report for the fiscal year ended March 30.
“While this may all amount to nothing, this is undoubtedly a serious matter, and it could be a while before transparency and investor confidence improves,”Cowen & Co analysts said in a report to clients.
The broker also noted it was“shocking” that Symantec had scrapped the question-and-answer portion of its conference call with analystsfollowing its quarterly earnings report on Thursday.
“The internal probe … could result in a restatement of financials but worse case, there is also the risk of leadership fall-out and/or customer hesitation if there are credibility concerns,”Deutsche Bank analysts said.
This is bigger than the June 2001 collapse in Symantec's share price…
Ironically, SYMC closed bullishly above its 200DMA yesterday before earnings.
This move has wiped over $6 billion in market from the company's valuation.