CNET receives subpoena for stock option back-dating
June 29, 2006I guess I haven’t been following CNET stock as closely as I should, I completely missed the story yesterday about the grand jury. Seems the company has received a subpoena related to the possible back-dating of stock option grants.
Now I knew there had been rumblings earlier about an investigation, but I hadn’t realized it had come to the subpoena stage. Still, doesn’t mean there’s anything wrong at CNET. Plenty of companies get subpoenas, they respond with all the appropriate records, and then company is cleared of wrongdoing. And life goes on.
The stock though has been punished a bit for this subpoena. Traded around $8.50 the day before the subpoena, then dropped as low as about $7.50 yesterday before recovering a bit. Stock is still down about 10% from the pre-subpoena levels.
It’s unfair, the fundamentals of their business have not changed. I think they have not done anything wrong, but the problem is that they’re now lumped into this bucket with a bunch of other companies. If even one of those other companies turns out to have done something illegal then CNET gets tarnished by association.