If you’re a Avid stockholder you might just freak out a bit right now: the company has postponed earnings from last quarter of 2012 and is now under investigation by at least two law firms.
First, let’s hear what Avid had to say about the postpone in a press release that for some reason missed my inbox.
Avid® (NASDAQ: AVID) today announced that it is postponing its fourth quarter 2012 earnings release and investor conference call, previously scheduled for Tuesday, February 26, 2013 to provide additional time for the Company 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. The Company is working diligently to complete its evaluation, but is currently unable to estimate when the evaluation will be completed.
So obviously this isn’t exactly making people happy, which is why Newman Ferrara LLP and Finkelstein Thompson LLP have both announced an investigation of Avid (according to Reuters).
I asked Avid about it and here’s their reply:
We recognize there are questions about the delay of our Q4 and full year 2012 earnings announcement. We want to assure our customers, employees, business partners, and investors that this delay is due to a technical accounting evaluation, as stated in our press release. We continue to invest in product innovation and execute on our growth strategy, and have significant cash and liquidity, and no debt. We are well-positioned to support our customers’ ongoing success.
In situations where companies have announced a delay in reporting earnings results, it is not unusual to see activity like this from certain law firms. However, according to our policy, we don’t comment on this type of activity.
It would be irresponsible of me to speculate on the topic (not least since it would show my complete lack of knowledge in US law!) but I think it’s worth emphasizing that the investigations being made are not by the government but by law firms.
Share your thoughts and insights in the comments field.