Having dealt with AMS once in the past as a client, I am not too surprised by today's market disaster. While the company has some great employees, I feel that management has a tendency to overcommit and overpromise. The stock has now retraced to 1995 levels. My sympathy to the employees and shareholders...
August 24, 2000 12:44pm
Consulting firm faces $474M setback
zdii.com
By Joseph C. Panettieri Sm@rt Partner
A $474.5 million jury verdict against American Management Systems (Nasdaq: AMSY) has slammed the technology consulting firm's stock. AMS plans to appeal the verdict, but investors in the company are nervous. AMS' stock fell about 31 percent this morning.
Legg Mason and BB&T Capital Markets also downgraded the stock.
In a 1999 lawsuit, the state of Mississippi took AMS to task over the development of an automated tax revenue system. A jury yesterday ruled in the state's favor, awarding $474.5 million in damages.
In a prepared statement, AMS CEO Paul Brands said the company is confident the verdict will be overturned on appeal. Said Brands: "The evidence presented in trial clearly demonstrated that AMS worked hard to resolve issues that arose during the acceptance testing and was on schedule to have the system in production when the Tax Commission prematurely terminated the contract."
"It is unfortunate that we could not put this situation to rest," added Brands. "We find the amounts involved inexplicable given that the contract was valued at $11.2 million, of which approximately $6 million had been paid to AMS." |
