NEW YORK—Shares of Comverse Technology Inc. sank after the company said it would miss a deadline for filing its annual report and probably be forced to restate earnings for the past six years.
The software developer said an internal review of its stock-options program would delay its 10-K annual report, which is due today. And Comverse said it likely will have to record charges for stock compensation payments each fiscal year from 2001 through 2005, as well as the first three quarters of fiscal 2006.
The move follows a Wall Street Journal report spotlighting a series of stock-option grants to Chief Executive Officer Kobi Alexander. The grants were often priced at or near quarterly low points in the company’s share price, according to the report.
One grant, dated July 15, 1996, was priced at the bottom of a sharp one-day drop in the stock, which fell 13 percent the day of the grant only to rebound 13 percent the next day.
Comverse said the review committee has “reached a 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 restatements will decrease income from operations and net income, the company said, but would not have a significant impact on its revenue or cash position.
Shares of the developer fell more than 4 percent on the news, sinking $1.05 to $23.15 by mid-day Monday.
