I've made no secret about my continuing suspicion that Taser International (NASDAQ:TASR) is taking a less-than-wholesome interest in managing its stock price through strategically timed press releases. Witness the endless litany of positive announcements, or defensive scripts like this one, taking a poke at a would-be competitor, or this one, defending recent, massive insider selling, or this one, touting -- for the umpteenth time -- the cardiac safety of the company's products.
Unfortunately, the folks at Taser have gone and confirmed my worst impressions yet again, this time via some suspicious, strategic silence.
According to a story in the namesake paper of the New York Times Co. (NYSE:NYT), Taser's flagship X26 stun gun needs tweaking to work more successfully. Back in September, the story says, Taser warned police departments that suspects zapped with the X26 were sometimes gaining "partial mobility" during the shock cycles. The story isn't clear on when, or how, the design changes were announced, and Taser hasn't returned my phone calls at this time.
Maybe it doesn't matter. But this does: Why were investors left in the dark?
I may be missing something here (and I've invited Taser to correct me, with no response so far), but when I check the firm's investor relations pages, I don't see any press releases around and including September discussing this issue. There is an obscure reference to X26 software upgrades in the latest 10-Q. I do see no fewer than seven other press releases, all of them detailing the exciting future of Taser: promoting its new, citizens-model X26, touting a military sale, and celebrating the mere possibility of sales to British police.
I won't even bother speculating on what this tweak cost, or might have cost, the firm. Is this the kind of fix that necessitates a recall? Does Taser expect it to cause more delays in procurement contracts? What does this mean for the citizen-model X26, which already operated at lower power? Will this add fuel to the speculation that police might actually migrate to the as-yet-unreleased products from would-be competitors like pink-sheet superstars Stinger Systems and Law Enforcement Associates?
Instead, let me just remind shareholders -- also for the umpteenth time -- that trust matters, especially when you're buying shares in a company that's sporting a sky-high valuation while predicting possible sales slowdowns. Let me remind Taser -- if anyone out there in Arizona happens to read this -- that you have a responsibility for clear communication to the shareholders. If you're praising your products in twice-a-week investor-relations press releases, you also have a responsibility to keep investors informed of any problems with that product, serious or not. That's especially important when insiders are selling $142 million worth of shares during the past year.
The past few weeks' tangled mess of heavy insider sales, suspicious-looking, last-minute sales, cozy-looking relationships with public officers, and questions about who gets stock options, how many, and when, is much more than a bizarre spectacle. It's a darn good reason to stay away from this stock until Taser starts issuing a lot more in the way of straight answers.
For related Foolishness:
- Is Taser stock making a stunning comeback?
- What was the unwanted buzz?
- Back in the day, I didn't think it was crazy to buy Taser.
Seth Jayson really wanted to like Taser, but alas, it's not to be. At the time of publication, he had no positions in any company mentioned. View his stock holdings and Fool profile here . Taser is a Motley Fool Rule Breakers pick. Fool rules arehere.
