Investors scamper from Veritas shares
Investors dumped shares of Veritas on Tuesday, reacting to a second restatement of financial results in as many years.
Shares of Veritas were down 8 percent, at the time of this report, to $26.73. This follows a 6 percent drop on Monday after Veritas announced it would restate figures for 2001 and 2002 and delay filing of a 2003 annual report. Last year, Veritas made a similar move, restating 2000 and 2001 numbers due to deals with AOL.
Overall, the accounting moves were relatively minor with revenue changing at most by $15 million in a given year. Veritas even said it expected to see a revenue increase for 2002, as a result of its investigation into internal accounting procedures. Veritas generates over $1 billion in revenue per year.
Investors, however, appear to have their doubts about Veritas' credibility.
The accounting gaffes occurred under the tenure of former CFO Kenneth Lonchar, according to Veritas CEO Gary Bloom. Lonchar was fired in 2002 after lying on his resume, saying he obtained an MBA from Stanford. Veritas also said that other employees responsible for the dodgy accounting have been axed.
Investors could gain confidence from Veritas' actions in the most recent financial changes. The company discovered the errors as part of its own review process, as opposed to being examined by the US Securities and Exchange Commission.
But with accounting concerns being a high priority, it appears that it will take time for Veritas to rebuild investor confidence. ®