IBM shares rebound
By Jim Krane
NEW YORK -- Shares of IBM Corp. rebounded in extended trading after the U.S. Securities and Exchange Commission said it had opened and then closed an inquiry of the computer maker.
An SEC spokesman said after the close of trading Thursday that the agency had opened an inquiry and "closed it without action shortly thereafter."
In after-hours trading, IBM shares regained some of the day's losses, bouncing back 3.8 percent, or $3.18, to $87.37.
Earlier Thursday, IBM's stock plunged after the release of the article, published by SEC Insight, a research firm that scours the SEC for word of investigations. IBM shares ended the regular session down $4.82 at $84.19 on the New York Stock Exchange.
Thursday's plunge in stock price was the second this week. On Monday, the shares fell almost 10 percent when IBM warned investors to expect lower-than-anticipated earnings.
John Gavin, president of Minneapolis-based SEC Insight, said his company received a letter from the SEC on April 4 stating that the SEC had started a preliminary inquiry into IBM on Feb. 15.
Gavin said the date of the SEC inquiry corresponded to the date of a New York Times article that questioned IBM's accounting of income it received from the sale of its optical transceiver business in Rochester.
IBM sold the business to telecom equipment manufacturer JDS Uniphase Corp. on Dec. 19
IBM used income from the sale to lower its operating costs, which gave the company's fourth quarter 2001 earnings report a boost. The company's earnings that quarter narrowly beat Wall Street analysts' expectations.
Gavin speculated that the SEC inquiry could relate to the press reports of IBM's unorthodox accounting practices.
Gavin said the purported probe was probably unrelated to an earlier SEC investigation regarding IBM employees in Argentina.
Last month, The Wall Street Journal reported that the SEC asked IBM two years ago to consider amending its 1999 annual report.