Laser Precision Corp. Says It Can’t Explain Drop in Stock
In an unusual step, Laser Precision Corp. issued a press release Thursday saying it is unaware of any reason for the recent slide in its stock price except for its recent change in top management.
The stock price for the manufacturer of test equipment started falling last Friday after the company announced that its chief executive, David Goodman, was being replaced by board member C. Frederick Sehnert.
The selloff was triggered by speculation that Goodman’s resignation was a sign of financial trouble or that the company had lost a major order from AT&T; Co. for equipment used to test fiber optic cables, said Fred Ziegel, analyst at Punk, Ziegel & Knoell, a research firm in New York.
But Sehnert said in the release that he is optimistic about the company’s future and the orders are on track with expectations. He said the company’s new Feature Finder product, which tests fiber optic networks, is expected to make a meaningful contribution to company revenues.
“There were rumors something else was going on, but there isn’t that we know of,” Sehnert said in an interview.
Laser Precision’s stock price dipped 28% from $14 a share last Friday morning to close at $10.125 a share on Wednesday in over-the-counter trading. After the announcement on Thursday morning, the stock regained $1.125 a share to close at $11.25 a share.
Volume for the stock was a heavy 388,700 shares on Thursday, compared to an average trading volume of 150,000 to 175,000 shares, Ziegel said.
“David Goodman apparently had a lot of fans,” said Gerald Fleming, an analyst at Needham & Co., an investment banking firm in New York. “The change triggered selling and there were a lot of rumors, but it looks like they were unfounded.”