Wednesday, July 14, 2004 - Red Hat Discloses Restatement Plan, Inquiry by SEC - Red Hat Discloses Restatement Plan, Inquiry by SEC "Red Hat Inc. said it would restate financial results for the past three years and disclosed a Securities and Exchange Commission inquiry, sending its shares down 23% and raising concerns about the credibility of the software company's management.
Investors and analysts said the restatement would have little impact on the company's earnings, only slightly changing its revenue and earnings per share for the three years. Meanwhile, the SEC inquiry isn't a formal investigation and relates to one annual report, Red Hat Chief Executive Officer Matthew Szulik said on a conference call.
But the restatement and the SEC inquiry came just weeks after Red Hat's surprise announcement that its chief financial officer was resigning for personal reasons. The string of announcements raised concerns about whether there are more surprises to come.
Shares of Red Hat, which traded as high as $29.06 on June 2, fell $4.62 to $15.73, their lowest point of the year, in 4 p.m. trading on the Nasdaq Stock Market. Volume was 37 million, compared with average daily volume of 5.5 million."
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