Investors were fleeing
Monday morning following news that the Securities and Exchange Commission is investigating the company.
Shares of the company were recently trading down 57.4% to $4.60 in Instinet premarket trading after ending at $10.80 Friday on the
New York Stock Exchange.
After the close of trading Friday, Enterasys said it would delay the release of its financial results for the fourth quarter and fiscal year ended Dec. 29. The company attributed the delay to the need to complete a review of certain issues arising from the terms of a $4 million sales contract recorded by its Asia Pacific operations.
The company, a maker of networking hardware and software, informed its auditor, KPMG, of the discovery and "is implementing a rigorous review of sales practices and revenue recognition in the Asia Pacific region."
Enterasys said the SEC probe is apparently unrelated to the company's Asia Pacific review. The company received notice of the investigation after the close of business on Jan. 31. The company plans to cooperate with the SEC's investigation.
Separately, the company has delayed the planned Feb. 5 spinoff of Aprisma Management Technologies. Enterasys didn't offer any explanation in a short press release.