Janney Montgomery Scott downgraded Comverse Technology (CMVT
) to neutral from buy, after the company said last week that outside directors will review its option grant procedures and the accuracy of previously stated grant dates.
Analyst Bill Gildea says that any potential restatement would not impact revenue or operating results (excluding stock option expense.) He notes that more recent news raises the inference of potential manipulation of grant dates prior to 2002. He believes the escalation of the option grant issue will extend the time frame for resolution, and create near term overhang on the share prices. He cut his fair value range to $22 from $30.