Openwave Systems Inc. shares fell Tuesday after the company said it will delay filing its fiscal third-quarter report with the SEC due to an internal investigation into allegations that some senior management members tried to "manage financial results."
The communication software company's shares fell 12 cents, or 5.6 percent, to $2.02. In the past year, the stock has traded between $1.20 and $10.58.
Late Monday, the company said it was investigating the allegations, which were made by an employee.
"To date, the investigation has not reached any conclusion that the company's previously issued financial statements and earnings releases were materially misleading," Openwave said in a statement.
Lehman Brothers analyst Amir Rozwadowski said in a client note that he sees the announcement as "another challenge in a roster of issues facing Openwave's new management team at the core of which is its ability to drive new product sales in order to offset declining contribution from its legacy solutions."
The company has seen several top executive changes in recent months _ interim chief executive Bruce Coleman took over after CEO Robert Vrij resigned in April. In January, Chief Financial Officer Jean-Yves Dexmier resigned with no explanation from Openwave.
Rozwadowski rates the stock "Equal Weight" with a $2.50 price target.
In a note to investors, RBC Capital Markets analyst Mike Abramsky said the allegations serve as a distraction for the Openwave's management while it tries to implement the company's turnaround plan.
"This, plus Openwave's weakening core business, delayed profitability and the management changes, make us cautious regarding the timing of any turnaround," he said.
Abramsky rates the stock "Sector Perform" with a $2.50 price target.
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