JNI Corp. (Nasdaq: JNIC) was still down Monday as it issued statements to contest two articles which appeared on Friday. The company believes that the articles -- one from TheStreet.com, and one from Dow Jones Newswire -- had a negative effect on its stock price.
Shares were off 3.06 to 67.06 Monday
The company's CEO said statements about Sun Microsystems (Nasdaq: SUNW) and the SBus market, as well as reports of his departure were misleading.
JNI said an article from The Street.com included quotes taken out of context from JNI's CEO, and quotes from short-seller who the company said "reaches erroneous conclusions about JNI's business."
The second, a series of articles by Dow Jones Newswire, "erroneously stated that JNI was concerned about revenue from SBus because Sun Microsystems was planning to discontinue the SBus interface; and that the company was replacing CEO Terry Flanagan," Wildermuth said.
Before the company could address the stories, the stock was sent down 38 points for the day. At that point, Nasdaq agreed to halt trading at JNI's request.
Aside from restating previously announced information as news, Dow Jones Newswire "misrepresented a fund manager's position about not knowing the information, causing further confusion about what was known by investors," JNI said.
Terry M. Flanagan, president and CEO commented on the issues brought up by Friday's stories.
He said his planned retirement "is not a story." It had been disclosed in the secondary, and in our third quarter conference call. Flanagan expressed commitment to finding the right successor.
"Even though I will be 63 years old in January, I will stay on forever if necessary, until we find what we are looking for," Flanagan said.
Flanagan also stated that the assertion that Sun Microsystems will eventually phase out the SBus interface from its servers is a risk that the company has stated in its "risk factors disclosure" in every document it has ever filed with the SEC, and Sun has never made any kind of announcement that it will do so.
Flanagan also said a report that the company derives a dangerously large percent of business from Sun is false. "Sun is an OEM (original equipment manufacturer) customer, but not a major customer for JNI. We have OEM contracts with all of the major storage system vendors in the world," he said.
The company will update investors on business for the fourth quarter in early December.