Shares of Taser International Inc. slid to their lowest prices in more than two years Wednesday as Wall Street considered the stun gun maker's outlook after Taser was found partially liable for a man's death.
The jury verdict, which came Friday in a U.S. District Court in San Jose, Calif., held Taser 15 percent responsible for the death of Robert Heston, after Taser devices were used on him during an arrest. The company was ordered to pay $1 million in compensatory damages and $5.2 million in punitive damages.
The Scottsdale, Ariz., company plans to ask for a new trial and to appeal the ruling. It maintains it has never lost a product liability lawsuit, and claims its products were not a causal factor in Heston's death.
Taser shares lost 21 cents, or 3.5 percent, to $5.94 in afternoon trading. The stock sank 11.2 percent Monday before making a modest recovery Tuesday. Earlier in Wednesday's session, it fell to $5.75, its lowest price since October 2005.
In a Monday client note, analyst Eric Wold of Merriman Curhan Ford said Taser successfully defended itself in 70 other liability cases, and has about 36 others pending. But he does not think the verdict will encourage new lawsuits because of Taser's past success in the courtroom.
Analyst Steve Dyer of Craig-Hallum Capital said in a note Wednesday the punitive damages are not covered by Taser's insurance, and as a result, he expects the company will take a one-time charge of 2 cents per share as part of its second-quarter results.
The jury found that Taser did not inform the officers that the device could be harmful if it was used repeatedly or for extended amounts of time. Heston, who died on Feb. 19, 2005, was hit by Taser devices as many as 30 times while police were trying to subdue him in his father's home.
An autopsy found that Heston died from a combination of methamphetamine intoxication, an enlarged heart due to long-term drug abuse, and Taser shocks.
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