Please ensure Javascript is enabled for purposes of website accessibility

Why Avid Technology Shares Plunged Today

By Evan Niu, CFA - Mar 16, 2017 at 12:35PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The media technology company has postponed its fourth-quarter and full-year 2016 earnings release.

Now what

Shares of Avid Technology (AVID -1.20%) have fallen today, down by 16% as of 12 p.m. EDT, after the company postponed its fourth-quarter earnings release and related conference call.

So what

The media technology company had originally planned on releasing fourth-quarter and full-year 2016 results yesterday after the close, with a conference call scheduled for 5 p.m. EDT yesterday, but instead announced the postponement.

Avid Interplay software

Avid Interplay software. Image source: Avid Technology.

Avid said the postponement would allow its independent auditor to compete "routine procedures related to the 2016 financial audit" and that it is "working diligently" to help the auditor complete its audit as expeditiously as possible.

Now what

Generally, quarterly earnings releases are unaudited but full-year results are required to be audited, which is a time-consuming process. Delaying an important release like full-year results spooks investors, who fear the worst in uncertain situations like this. Since the company's explanation for the delay is somewhat vague, it stokes fears that something is wrong with its accounting or internal financial controls, which may or may not be the case. The point is that investors don't know if there's something more sinister going on or if it's truly just a procedural delay. Avid has not specified exactly when it will release results and 2017 guidance beyond "as soon as possible."

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Avid Technology, Inc. Stock Quote
Avid Technology, Inc.
AVID
$27.23 (-1.20%) $0.33

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.