The death spiral for the 131 year-old company, once respectfully known as Diebold, continues, as its stock price falls to a 5-year low today, near year's end (currently $29.23/share and still sinking, from a 52-week high of $54.50/share), along with the additional news that the U.S. Department of Justice has now joined the SEC in an investigation concerning the company's "Enron-like" bookkeeping tricks...
Diebold announced in early October that it has been engaged in an ongoing discussion with the SEC’s Office of the Chief Accountant regarding its former use of the "bill and hold" method of recognizing revenue.
Under bill and hold, ownership of a product contractually passes to a customer and revenue is recognized by the supplier prior to delivery of the product to the customer.
Diebold said it’s in continuing talks with the Office of the Chief Accountant so that it can determine what the company termed “the most appropriate revenue recognition method” to replace its bill and hold practice.
The BRAD BLOG, of course, originally reported on the SEC's investigation into Diebold's book-keeping chicanery back in May of 2006, just a few months after our first exclusive report, based on information from a company insider we dubbed DIEB-THROAT, preceded a 20% stock-price plunge just days afterward.
At the time, back in late September 2005, the stock price plunged to a 52-week low of about $44.37/share (which we're sure they'd kill for now --- not that we wish to give them any ideas) and DIEB-THROAT told us in response to the related news: "the last time this kind of deception occurred it was called Enron."
Then came a class action securities fraud suit against the company in December 2005, as first broken by The BRAD BLOG natch, before the parallel SEC investigation first became public.
Since then, following one independent study after another after another after another, finding their electronic voting systems to be virus-prone, hackable, unreliable and inaccurate, the company finally dumped it's controversial CEO who had infamously promised in a Republican fundraising letter that he was "committed to helping Ohio deliver its electoral votes to" George W. Bush in 2004, before attempting again to fool the American public by renaming its election division "Premiere Elections Solutions" (same pig, fresh lipstick), just after stock prices plummeted again in August of this year to $47.60 as The BRAD BLOG noticed what appeared to us, and at least one financial analyst, to be possible insider trading among a number of company officials.
Prices have continued to fall ever since --- a lucky coincidence, no doubt, for those executives who just happened to unload a bunch of stock near the year's high at $53.05 - to today's 5-year low of $29.20.
Additional bad news arrived last Friday for Diebold when a new study by the state of Ohio found their systems to be easily hackable (again), with better news coming last Tuesday as the state of Colorado's own certification tests, surprisingly, gave their their machines a pass while decertifying many others. Yesterday, however, the reason for the inexplicable get-out-of-jail card they received in CO may have become a bit clearer: As it turns out, the Republican Secretary of State who oversaw the new certification testing, Mike Coffman, is running for Congress, and his campaign shares the same consultants as Diebold/Premier in the state. Go figure.
Diebold/Premiere's spokeshole, Chris Riggall told the Rocky Mountain News in response yesterday, that the company just had no idea about the extraordinary conflict of interest. But with the mission already accomplished, he announced to the paper: "Effective tonight that relationship is terminated."
With their stock-price still spiraling this morning, Diebold is quoted by Crain's Cleveland Business today as saying the company "anticipates [the DoJ] review will be completed in the first quarter of 2008" ... Though rest assured, The BRAD BLOG's review of the company won't be completed by then. Not by a long shot.
Merry Christmas, Diebold!