SAN FRANCISCO (08/25/2000) - Emulex Corp.'s shares plummeted Friday morning, following the publication of what the company calls a fictitious press release.
Citing unknown persons as the culprit, Emulex -- a supplier of Fibre Channel products for storage area networks -- said that the hoax release falsely stated that the vendor's chief executive officer had resigned and that fourth quarter results would be restated to reflect a loss. Additionally, the fabricated release claimed that Emulex faced investigation by the U.S. Securities and Exchange Commission.
"The negative statements in this fictitious press release are categorically false. Emulex has just completed an audit of our year end results, which we announced on August 3, and there is no truth to the rumor that our historical results will be restated. We have contacted the appropriate authorities, who are investigating this matter, and we intend to launch our investigation into this fraudulent release," said Paul Folino, chief executive officer of Emulex, in a company release.
Shares in the Costa Mesa, California-based company dropped almost 50 percent on the news. The Nasdaq exchange ordered a stop to trading of Emulex shares at 10:28 a.m. EDT. The company's stock then resumed trading at 1:30 p.m. EDT with quoting starting five minutes earlier.
Once trading of Emulex resumed, the company's stock managed to recoup most of the earlier decline. A recent price of US$108 per share stands well above today's low of $43. The stock opened just below $111 per share and reached a day's high of $130 before the false release appeared.
Emulex, based in Costa Mesa, California, can be reached at +1-714-662-5600 or http://www.emulex.com/.