NEW YORK (TheStreet) -- Shares of Aruba Networks (ARUN) took a pounding on Tuesday when the network software company announced it had delayed filing of its full-year financial results with the Securities and Exchange Commission. While citing internal control issues, the company said it needed more time to confirm the accuracy of its accounting data.As it stands, Aruba has 15 days to file and the company said not only does it expect to meet the time requirement, but it does not anticipate any adjustments to what it has already disclosed. While its assurance to investors does help to some extent, it is hard to ignore the new risk that this situation introduces. Investors sent the stock down more than 7%. Is this an overreaction or legitimate cause for concern?
Within the networking space, competition is always a huge consideration and I didn't feel Aruba addressed it well enough. I anticipate there will be pricing pressure from the likes of Cisco ( CSCO), Hewlett-Packard ( HPQ) and Juniper ( JNPR). In particular, Cisco and HP has better margin leverage. Can Aruba overcome any sort of attack from either or both companies and be able to maintain its level of profitability? Also, while I'm not ready to proclaim that Aruba has any sort of technological advantage over its rivals, I think the company must figure out a way to leverage what it does well and in order to do it more effectively.