Fly on WallStreet

I am currently short 5,000 CMVT. Sometimes I get lucky.

Via Briefing:

Comverse Tech provides update on its investigation; co identified errors in the recognition of revenue related to certain contracts (20.64 -0.32) : Co announced that, in connection with the ongoing investigation by the Special Committee of the co's Board of Directors of the company's stock option practices and related accounting matters, the co identified errors in the recognition of revenue related to certain contracts, errors in the recording of certain deferred tax accounts and the misclassification of certain expenses in earlier periods. In addition, based on information provided to the co, areas of financial reporting under investigation include the possible misuse of accounting reserves and the understatement of backlog in fiscal 2002 and prior periods. The co previously had disclosed its preliminary conclusion that the actual dates of measurement for certain past stock option grants for accounting purposes differed from the recorded grant dates for such awards. The co substantially has completed its investigation of employee stock option practices and has made a preliminary determination of the effect on its previously issued financial statements. The Special Committee's investigation continues, and the co is unable to estimate the effect of the other accounting issues on its previously issued financial statements or the time it will take to complete the necessary restatements.

Susquehanna says CMVT reports further problems, indicating financial restatements are likely to extend beyond options repricing to rev recognition and the possible misuse of accounting reserves. At this juncture, firm has limited visibility into the impact to their forecasts or the timing of the pending restatements. Therefore, they are more comfortable on the sidelines and are removing their recommendation of CMVT shares. Firm believes the most likely scenario is an extended 6-12 month delay in reporting restated financials, which should increase the possibility of delisting by the NASD. Outside of any potential good news from periodic backlog announcements, future positives are likely to be longer term, with: (a) restated financials; (b) updated listing status; and/or (c) possible acquisition. With a backlog of $750+ mln, a product upgrade cycle underway, and net cash of ~$1.4 bln, firm believes the shares could be attractive to strategic and financial acquirers.

Finally, Goldman downgraded these crooked fuckers to a sell.

I win.