Overland Stock Up Following CRN Article
By as much as 25% in only five days
By Jean Jacques Maleval | January 21, 2008 at 3:19 pm
We first comment on this subject on:
http://www.storagenewsletter.com/news/business/overland-publication-error
To summarize, CRN published last January 11 an article entitled “Overland on a roll with storage disk sales boost” in which Overland’s EMEA marketing director Chris James, before the official release of its company’s fiscal 2Q08 financial results, was quoted: ”Overland has seen an upward trend in disk-based products and last-quarter sales were boosted by 70 per cent.”
Reaction of the tape manufacturer in a press release dated January 16:” An article, which appeared on Monday, January 14th in a computer trade publication based in the United Kingdom, contained an editorial error that overstated the company’s UK sales results for the final calendar quarter of 2007.” Apparently, Overland did a mistake concerning the date of publication.
Anyway, CRN removed this article written by Kayleigh Bateman from its Web site. We think that the journalist did perfectly his job to get this “scoop” and we don’t understand why the editor didn’t let this article on the Web.
On our side, when we read the Overland press release, we began to search this UK article. Of course. It was not anymore on the CRN site, but we finally find and publish it on this site with our comments. Just doing our job.
We could think that the James’ statement, coming from Europe, will not have any incident on the share price of the public U.S. company. But look at that: the evolution of the price of the Overland’s share: on January 11, it was $1.43 and then increasing regularly to reach $1.79 on January 15, or a 25% growth in 5 days! On January 18, the price continues to remain at the same high level with $1.77. For a comparison, in the same January 11-18 period, the Nasdaq Computer Index was down by 4%.
For fiscal 1Q08 ending in September, Overland stated that, for its quarter ending in September 2007, disk based products revenues increase 24% annually (from de 6.2% to 9.8% of its total revenue) and 19% sequentially. If it’s 70% for 2Q08, you can imagine that it can be a good deal to acquire Overland’ stock, even if disk products represent a minor part of the company’s activity.
Of course, we cannot prove that this increase is only the direct result of the CRN article. But it’s strange.
We will get the exact figure on the company’s disk business on Thursday, January 24, 2008 at 9:30 a.m. EST, time of publication of the press release discussing 2Q08 financial results.
As it happens regularly in the U.S., it’s possible that a law firm will jump on this affair. The lawyer first will try to recruit some Overland’s shareholders as plaintiffs, then publishing a press release to get more of them. He will tell them that they will not have to pay anything for this class action for false statements, and that they will get some money if the lawyer succeeds in a U.S. District Court, even if it’s a small part of what he will finally get following a judgment or a financial agreement.
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