New York, NY (February 27, 2013)—Avid has postponed its fourth-quarter earnings report, prompting concern from shareholders and a notable drop in Avid stock. In a statement, the company cited an undisclosed accounting issue as the reason for the delay; originally slated for Tuesday, the company’s earnings call has now been postponed indefinitely.
The statement noted that Avid required “additional time…to evaluate its current and historical accounting treatment related to bug fixes, upgrades and enhancements to certain products which the Company has provided to certain customers. The need to evaluate the accounting treatment arose during the Company’s normal review of its financial results for the fourth quarter and full year 2012.”
Unsurprisingly, Avid’s stock took a hit, dropping .76 cents on the NASDAQ exchange since Monday’s news to $6.90; less than two weeks ago, it was trading at $7.95, but remains well above the 52-week low of $5.87, back on October 31. Nonetheless, the stock has lost 40 percent of its valuation since this time last year, having sat at $11.46 on Feb. 26, 2012.
In the wake of Avid’s delay, a law firm, Newman Ferrara LLP, announced on Tuesday an investigation on behalf of shareholders “into potential violations of federal securities laws and breaches of fiduciary duty by Avid and certain of its officers and directors.” A second law firm, Finkelstein Thompson LLP, declared its own investigation two hours later.
The delay comes only two weeks after Louis Hernandez, a member of Avid’s Board of Directors since 2008, was named its new president and CEO, following the unexpected resignation of Gary Greenfield, who remains on Avid’s Board.