Taser soars after safety endorsements
By Dan Burrows, CBS MarketWatch.com
Last Update: 9:44 AM ET Jan. 13, 2005
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NEW YORK (CBS.MW) -- Taser International shares shot up more than 22 percent in Thursday morning trading after reports from a medical journal and the Pentagon asserted the company's stun guns are safe.
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Taser's (TASR: news, chart, profile) stock added $3.88 to $20.85 in recent dealings.
The Scottsdale, Ariz.-based maker of "less-lethal" weapons said a cardiac safety study published in the Pacing and Clinical Electrophysiology Journal found that Tasers had an "extraordinarily wide safety margin" for causing heart fibrillations.
Dr. Richard Luceri, a cardiologist and member of Taser's medical advisory board, said in a statement the company's stun guns have a greater safety margin than most cardiac drugs approved by the Food and Drug Administration.
Meanwhile, the Department of Defense said a study conducted by the Air Force Research Laboratory found that Tasers do not have a "significant risk of unintended severe effects."
Those reports followed Wednesday's endorsement of Tasers by a Miami-Dade County panel of county commissioners.
The grand jury "strongly recommended" the use of Tasers by police in their "confrontations and dangerous encounters with mentally ill subjects."
Taser's stock lost almost half its value between Jan. 6 and Tuesday's close, following a series of disclosures that rattled investors.
Among the issues battering Taser's shares was its Jan. 6 statement that it was cooperating with an informal Securities and Exchange Commission probe into its safety statements and a sale to a distributor.
Additionally, on Tuesday the company warned that it may see some delays in orders in the first half of fiscal 2005, as customers test and evaluate potential rivals' products.
One would-be rival, Stinger Systems Inc. (STIY: news, chart, profile), which trades on the pink sheets, has seen its shares move in inverse proportion to Taser's.
That company's stock plunged 35 percent Wednesday to close at $30, while Taser's shares added 21 percent to $17.01 after the Miami grand jury's endorsement.
On Nov. 30, Amnesty International linked more than 70 deaths to Taser stun guns and urged law enforcement agencies to suspend use of the weapons pending a rigorous, independent safety probe.
Dan Burrows is a reporter for CBS MarketWatch in New York.
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