sundance-communications.com/forum Forums General Telecom News Shoretel

I saw today that their stock is down below 6 dollars now. Apparently it was over 20 dollars when they first launched their IPO.

That is surprising, did they give any reasons for the drop?

here is some more info I just found:
https://biz.yahoo.com/ap/080107/shoretel_last_call.html?.v=1

That's strange. There was no mention in that article about ShoreTel's recent legal troubles as being part or all of the reason for the down-turn in their stock price.

Was there ever a resolution to that?

Justin

Not from what I have heard...don't know if it's still going on.

The reason for the drop was that they didn't meet their forecast for the quarter. Their sales were up 40%, but ShoreTel forecasted more. I think it is silly to base a companys worth on sales forecast and not look at the whole. They sold something like 35 million this quarter and they forecast for 38 million, something to that affect.

https://biz.yahoo.com/iw/080116/0349070.html

Here's the lawsuit. The recent fall isn't really about last quarters numbers.

DrPbx, if I'm reading that correctly, it looks like the lawsuit is about investors not receiving the returns they anticipated.

In the article Jeff linked to above it says that the forcasted sales were in the range of $32 - $35 million whereas the company would report sales between $29.7 and $30.7 million. The analyst quoted in the artice seemed to blame the shortfall on a weakening US economy.

I'm not sure how Shoretel could see that coming and how investors could blame Shoretel for that. I suppose, as usual, the devil's in the details, which we haven't seen yet.

It was about fudging the numbers prior to the IPO.

'Investors learned the truth about the Company on January 7, 2008 -- including that the problems which existed at the time of the IPO. In addition, by this time, it became obvious to investors that the Company did not maintain adequate internal controls, and that a proper due diligence investigation into the Company, by the Underwriters, was not properly carried out prior to the Offering.
ShoreTel, certain of its officers and directors, and the Company's underwriters are charged with including, or allowing the inclusion of, materially false and misleading statements in the Registration Statement and Prospectus issued in connection with the IPO, in violation of the Securities Act of 1933.'

Yes, but let's keep in mind that it's lawyers seeking money who are making these claims. It just sounds to me like a group of lawyers trying to take advantage of a situation where inverstor's are upset that they lost money on stock price speculation.