More Signal. Less Noise.
The Wall St. Journal published an article on March 16, 2006 that uncovered the issue of stock option backdating. They were awarded the Pulitzer prize yesterday for this coverage. I’ve opined on the issue at length and written about many of the companies impacted.
Continue reading ‘WSJ Wins Pulitzer for Backdating Investigation’
Vitesse (VTSS.PK) announced the results of the review by the Board of Directors into stock option backdating and revenue recognition issues. I found the release lacking in new information, and I expected to see more information about the implication of several disclosures.
Continue reading ‘Vitesse Announces Result of Investigation’
Vitesse Semiconductor Corp (VTSS) is mentioned yet again in today’s WSJ. Bondholders are descending on companies who have failed to file financial statements with the SEC due to options backdating investigations. Technically, these companies are in default and bondholders can demand immediate repayment. If the company cannot pay, they could be forced into bankruptcy.
I am listening to the Vitesse Semiconductor (vtss) conference call.
Many people have asked me what I thought about owning Vitesse stock. My only answer was that “I didn’t own any”.
Today, on the Vitesse conference call, the details came out. Revenue recognition issues.
There is still something unseen, and related to Vitesse.
Notes from the call are below:
Continue reading ‘Vitesse Conference Call’
Looks like the WSJ managed to purchase some more computer time for their options backdating algorithm and in this mornings paper they name the new five lucky winners - click on the graphic to the right.
This issue is of interest to me since I spent over 10 years at Vitesse Semiconductor (VTSS), a company that has been roiled by this issue in the last month. It’s also one of many reasons why incentive options should always be accounted as an expense and included in pro-forma results.
Continue reading ‘Options Backdating Reloaded’
Tomorrow’s Saturday edition of the WSJ has a short article on Vitesse Semiconductor (VTSS) and the cancellation of Monday’s earnings call.
According to a release made today by Vitesse, the suspension of three executives was related to the “integrity of documents” involving its stock-option program. They also cancelled the earnings release and call scheduled for Monday.
The announcement, made Thursday night, came two days after Vitesse placed CEO Louis R. Tomasetta, its chief financial officer and an executive vice president on administrative leave and said it established a special committee of directors to probe option-grant timing.
It isn’t clear exactly what the company meant when it referred to the documents’ integrity, and the company didn’t respond to requests for elaboration.
I spent a large part of my life and a tremendous amount of sweat equity working at Vitesse and it rips my guts out to see what the company is currently going through. What is most frustrating is I am certain that the imminent threat of shareholder-class lawsuits from nice folks like Lerach are making public information scarce and rapid resolution of the issue impossible. I’d like to know what the hell happened, just like everyone else.
PMC-Sierra (PMCS) paid $400M cash for the Avago (Agilent) storage semiconductor business that was generating $110M a year in revenue. Storage makes up roughly 1/2 of Vitesse revenues ($200M a year) and their prospects in the SATA market look solid - a transitive valuation of the Vitesse storage business is roughly $500M. The Telecom and Ethernet divisions generate another 100M a year.
Best of luck to everyone at Vitesse.
Original article from the WSJ that started it all can be found here.
I’m in New York at a Lightreading conference. Trading has been halted in Vitesse Semiconductor (NASDAQ: VTSS) all day.
Consolidation in the communication semiconductor area is long overdue. The length of the delay (5 hours now) would indicate that someone, somewhere was surprised.
There is also the WSJ article on options backdating, though it’s hard to see why an investigation would halt the stock for so long.
I’m keeping an open mind and hoping that they are helping lead the consolidation of the industry, as they did a year ago in the aborted AMCC (NASDAQ: AMCC) merger (and the echo-rumors that followed). This is what needs to happen.
UPDATE: An internal investigation is being launched into stock options backdating…. but why the sudden surprise and trade halt?
The WSJ Saturday edition is quickly becoming one of my favorite reads. The weekly interview in the editorial section is well done and pulls in important people with a low public profile (past guests include Jean LePen, Newt Gingrich, Carlos Ghosn). Page one typically features some in-depth investigative journalism. Last week it was statistical trends on mortgage refinancing. This week it was a well documented article on options backdating, when companies retroactively set the strike price for employee stock options. My previous employer, Vitesse Semiconductor (VTSS) and CEO Lou Tomasetta was profiled as one of the ‘accused’.
Continue reading ‘WSJ Analyzes Stock Option Backdating’
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