Hello Pierre,
Okay, I looked it up for you...
azcentral.com
Use the archives page (link at the bottom of the home page) and search on "OrthoLogic". You'll get 224 hits...
Here's an encapsulated version of what happened to them over a time frame starting in 1996 to approximately early 1999. Hopefully, all of their problems are now behind them and you can catch something good here. How about a 5-bagger or something like that? <g> I'm not necessarily in correct chronological order here, but the problems were real at one time or another within this time frame...
Coming into 1996, OrthoLogic was a Wall Street darling, beloved by everyone. Fantastic revenue growth, and earnings growth to boot... Ooops...
They posted revenues and earnings that fell far short of expectations one quarter in 1996. The stock dropped like a lead balloon. Accusations and rumors/innuendo were flying everywhere. Analysts weren't prepared for the bad numbers... The company didn't pre-warn... The insiders sold shares before announcing the numbers, even though they knew what was coming... Just what was rumor and what was fact was never made clear (publicly) at the time. Hence, one or more shareholders lawsuits were filed. I don't know if these lawsuit(s) are resolved yet or are still pending.
In the same time frame, they were dinged by the Feds (FDA???) for claims in their promotional literature that went too far. The stock plummeted on this news as well. (This may have been the first incident; not sure.) I'm not sure what the resolution to this issue was, but I'm presuming that it's behind them by now.
They incurred 3 changes of CEO within a 1 year time frame, which again wasn't very popular with investors at the time.
Then they announced that they couldn't collect debts owed to them, so they took something like a $9M charge in one quarter to write off the uncollectible debts. A very unpopular (but necessary) move...
Then another dispute with another Federal agency (for over-billing, I think). Rather than fight the government (expensive and costly), they settled without any plea one way or the other for about $1M.
So, in summary, they had about 2.5 years worth of nothing but bad news, and the stock price really suffered because of it. Now they have a new management team in place, and maybe a fresh start. At one time this stock was selling really pricey (in the $50s if I remember correctly, and that may have been a pre-split price; can't recall exactly). Now they're selling at a mere fraction of their former heyday price.
While an investment here might be considered speculative by conservative standards, you may have found a good company well along in a recovery. I wish you well and hope you get a good return.
KJC |
