ComScore stock plunged more than 30% ($7.66 each) to $21.74 per share in early trading Tuesday after the measurement company said it would require more time to file its 10-K annual and 10-Q quarterly reports with the Securities and Exchange Commission.
The stock closed at $23.81 per share June 28, down 19% or $5.59 each.
ComScore revealed in March that its board of directors received a message regarding potential accounting matters at the company. While details regarding those potential matters weren’t revealed, its Audit Committee immediately began a review of the matters with independent counsel and advisors. ComScore had said in May that it expected to provide a further update on its progress by June 27.
The announcement came about one month after comScore completed its merger with set-top box measurement pioneer Rentrak, creating a more formidable rival to powerhouse Nielsen.
In its update, filed with the SEC on June 28, comScore said that its Audit Committee “continues to work vigorously to complete its review and to report its findings to the Board,” adding that the committee has completed a substantial amount of the factual inquiries in the review.
But the committee added that it would need more time “to evaluate the information collected and to reach and evaluate final conclusions.”
In a research note, Telsey Advisory Group media analyst Tom Eagan wrote that while investors weren’t expecting that the 10-K and 10-Q would be filed, they did hope for a little more detail from the company.
“Our take on the 8-K is that the company is farther away from resolving its accounting issues than we had expected,” Eagan wrote.” Our concern is that any revisions to its financial statements do not reflect just reductions in Non-Monetary Revenue (NMR), but lower Stock-based Comp (SBC) and dis-synergies with the integration of Rentrak's operations.”
Eagan downgraded the stock to "market perform" from "outperform," lowering his 12-month price target to $30 per share from $60.