| Tech Stock News and Analysis |
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| Wednesday, June 28, 2006 |
Rambus, CNET Shares Plunge in Premarket After Firms Warn of Stock Option Investigations
NEW YORK -- Rambus Inc. and CNET Networks Inc. shares plunged ahead of the opening bell Wednesday after the tech companies warned profits might have been influenced by the timing of stock options granted to employees.
Both join a long list of companies that are reviewing past compensation practices. Rambus, a Los Altos, Calif.-based chip maker, and CNET, a San Francisco-based technology information provider, could be forced to restate past earnings because of their investigations. Foundry Networks Inc. also disclosed Tuesday it received a subpoena seeking more information about their stock option awards from the DOJ.
Dozens of technology companies have begun to scrutinize the way stock options are distributed to insiders. At the heart of these investigations is whether or not company insiders rigged the system to increase the likelihood management would reap huge windfalls.
Rambus tumbled $3.15, or 13.6 percent, to $19.98 in premarket electronic trading on the INET after closing Tuesday at $23.13 on the Nasdaq. The stock had traded as high as $46.99 in April.
CNET shares fell 51 cents, or 6.1 percent, to $7.86 in premarket activity, having closed at $8.37 Tuesday on the Nasdaq. The stock has traded within a 52-week range of $8.20 and $16.09.
Foundry Networks lost 32 cents, or 3.3 percent, to trade at $9.53 on the INET premarket, having closed Tuesday at $9.85 on the Nasdaq.
Biomet Inc. shares finally broke out of their slump after reporting fourth-quarter profit -- excluding charges -- in line with Wall Street expectations. The Warsaw, Ind.-based orthopedic device maker also told Wall Street it continues to make progress in a restructuring and executive shake-up of its EBI unit.
The stock has steadily declined this week after the Justice Department launched an antitrust probe of several major players in the industry, sending shares of those companies dramatically lower. On Tuesday, Biomet shares wobbled to a 52-week low of $31.16.
In premarket trading, Biomet shares rose $1.26, or 4 percent, to $32.45, after closing Tuesday at $31.19 on the Nasdaq. |
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