Sonus Cleared by SEC, Stock Jumps
Sonus shares closed at $4.64, up $0.25 (5.69%). The 52-week range in the stock has been $2.94 to $7.02.
Sonus undertook a major review of its books and got into hot water with the SEC after revenue recognition issues came to light in early 2004. Last year, it restated is earnings for 2001-2003, and the SEC launched a "formal inquiry." The latest news from the company appears to put those chapters and its troubles with the SEC to rest, though it still has shareholder lawsuits to contend with. (See Sonus Drops a Bomb, SEC Steps Up Sonus Probe, Sonus Soothes Numbers Nerves, and Sonus Files, Share Price Rockets.)
Sporting one of the more volatile stock prices in the telecom supplier world, the news that the SEC inquiry has ended appears to have soothed the nerves of many investors, although the softswitch vendor's uneven financial performance still weighs on Wall Street (see Sonus Dips Into the Red).
"While this announcement is a clear positive, the ruling does not change the company's inability to forecast revenues nor does it lower the significant operating expenses that are required to strengthen Sonus' internal controls," wrote Lehman Brothers analyst Steven Levy in a note to investors this afternoon. Levy still rates Sonus Underweight, meaning he thinks it will underperform the market.
— R. Scott Raynovich, US Editor, Light Reading