Symantec shares dropped nearly $10 in the largest decline since 2001 when the company said its board’s audit committee was in the process of looking at “concerns” flagged by an ex-employee. In addition, the stock was downgraded by several analysts, Reuters reported.
“This may be far from over,” Adam Holt, analyst at MoffettNathanson Research, wrote to investors. He put a “sell” recommendation on the stock.
Analysts at Cowen Inc. also wrote to investors, “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.”
But Cowen noted the company didn’t have a question-and-answer portion of its post-earnings conference call on Thursday (May 11), which Cowen said was “shocking.” The news comes as Symantec warned that its financial results and earnings targets could be altered, depending on the outcome of an internal investigation brought on by the concerns of the ex-employee.
In a press release announcing quarterly results, the security software company said the audit committee of the board of directors has started the internal investigation and has hired an independent counsel, and other advisors, to assist in its investigation. Symantec said it alerted the Securities and Exchange Commission and that it will continue to keep the government agency apprised of the inquiry.
“The investigation is in its early stages and the company cannot predict the duration or outcome of the investigation,” said Symantec. “The company’s financial results and guidance may be subject to change based on the outcome of the audit committee investigation. It is unlikely that the investigation will be completed in time for the company to file its annual report on Form 10-K for the fiscal year ended March 30, 2018 in a timely manner.”