If you think you've seen this movie before, well, you have. VeriFone Systems Inc. (NYSE: PAY) is replaying the scenario the company rehearsed more than two years ago when the stock price plunged by about $25 a share. That time the cause was a large insider stock sale by the company's CEO, followed by a U.S. Justice Department suit to block an acquisition.
This time, the chief executive has been cleared recently of another Department of Justice inquiry into his stock trading practices, but the company has cut its forecast dramatically, once again costing shareholders hundreds of millions of dollars.
Maybe the lesson from all this is that skepticism should be the rule when an investor is considering putting some money into VeriFone. It just could be that there is no there there.
Shares are down nearly 39% this morning to $19.62, and they posted a new 52-week low of $19.43 earlier today. The prior 52-week range was $27.33 to $55.89.
Filed under: 24/7 Wall St. Wire, Business Services, Earnings Warning Tagged: PAY