Senators Seek Information From Fiserv After Last Week’s Guidance Cut

Two senators are reportedly seeking information from Fiserv about the role former Chairman and CEO Frank Bisignano played in the company’s financial forecasts.

The request was made a week after Fiserv cut its guidance and reported third quarter results that were below expectations, and the stock market reacted by wiping out $30 billion of the company’s market value, the Wall Street Journal reported Friday (Nov. 7).

Senators Ron Wyden, D-Oregon, and Elizabeth Warren, D-Massachusetts, requested the information in a letter to Fiserv, according to the report.

Bisignano left Fiserv in May when he was confirmed by the Senate to be commissioner of the Social Security Administration. He was appointed to the additional role of CEO of the Internal Revenue Service in October.

Neither Fiserv nor the Social Security Administration immediately replied to PYMNTS’ request for comment.

In the senators’ letter to Fiserv, they referred to last week’s events and wrote, per the report: “This drastic reversal raises significant questions regarding Mr. Bisignano’s conduct. At a minimum, Mr. Bisignano appears to have failed to manage Fiserv effectively, and may have misled investors and the public about the company’s financial status.”

PYMNTS reported Oct. 29 that during the company’s third quarter earnings call, Fiserv CEO Mike Lyons said that the company’s results were disappointing and that its revised guidance followed an internal company analysis.

“One of the key takeaways from our analysis is that Fiserv’s growth and margin targets need to be reset … it became clear that there were incremental assumptions embedded in our guidance including outsized business volume growth, record sales activity and broad-based productivity improvements, all of which would have been objectively difficult to achieve even with the right investment and strong execution,” Lyons said.

Fiserv’s third quarter results posted before the market opened on Oct. 29, and the company’s guidance cut that pointed to growth rates being sliced roughly in half sent the stock plunging more than 40% in that day’s early trading.

The firm’s shares fell 44% by the end of Oct. 29 and as much as 6.7% on the following day.

According to Friday’s WSJ report, Fiserv’s stock price Thursday was about one-third of what it was in the spring.