IBM said on Thursday that U.S. securities regulators were formally investigating the world's biggest computer services company's first-quarter earnings report and expensing of stock options.
The disclosure, which sent the company's shares down as much as 1.3 percent, follows an informal investigation that IBM revealed in June. The stepped-up investigation gives the U.S. Securities and Exchange Commission the power to subpoena documents, e-mails and individuals.
First-quarter 2005 profit fell short of the average analyst estimate by 5 cents per share, a big miss for IBM. But many analysts eventually concluded the miss was 9 cents per share, or nearly double the apparent shortfall, once they understood IBM's accounting for stock options. Read more
The disclosure, which sent the company's shares down as much as 1.3 percent, follows an informal investigation that IBM revealed in June. The stepped-up investigation gives the U.S. Securities and Exchange Commission the power to subpoena documents, e-mails and individuals.
First-quarter 2005 profit fell short of the average analyst estimate by 5 cents per share, a big miss for IBM. But many analysts eventually concluded the miss was 9 cents per share, or nearly double the apparent shortfall, once they understood IBM's accounting for stock options. Read more
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