ALL - Here's an article out of today's WSJ regarding RSYS' drop in price last Friday. In the interest of fairness I have included the entire piece. However, the most important part, at least to me, is the mention that Cowen analyst Robert Stone says that Cowen has reviewed RSYS' numbers and found everything in order. As I previously mentioned, 3 firms (Jensen, Cowen, and JP Morgan Securities) lined up behind RSYS on Friday.
The Wall Street Journal Interactive Edition -- February 3, 1997
RadiSys Stock Plummets
On News of SEC Request
By a WALL STREET JOURNAL Staff Reporter
HILLSBORO, Ore. -- RadiSys Corp. shares plunged 20% after the company disclosed that the Securities and Exchange Commission had asked for documents related to its accounting practices.
The company, which makes circuit boards known as embedded computers, was sued last summer by a former employee who alleged that he was fired after he blew the whistle on overstated inventories and other accounting irregularities at the company. RadiSys denies those allegations, which caused a 15% one-day
drop in its stock in November after Barron's magazine reported them.
But the company hadn't disclosed the SEC's interest in the matter until Thursday night in a conference call following its fourth-quarter earnings announcement. A company spokesman said it contacted the SEC after the Barron's article to volunteer its cooperation, and said the agency later made a written request for
supporting documentation for its financial statements and other information related to allegations in the lawsuit.
The company said it has had no communication from the SEC since mid-December, when it fulfilled the document request. Robert Stone, an analyst at Cowen & Co., said his firm had examined documents related to the accounting issues and concluded that there is nothing wrong with its practices. Cowen was a lead underwriter on RadiSys's initial public offering.
Radisys on Thursday said it had net income of $3.6 million, or 46 cents a share, in the fourth quarter, up from $630,000, or 11 cents, a year ago. Analysts surveyed by First Call Corp. had predicted profit of about 42 cents a share.
On Friday, the stock fell $11.50, closing at $46 on the Nasdaq Stock Market.
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