Saba Declines 18% After Delaying Earnings: San Francisco Mover

Saba Software Inc. (SABA), a maker of Internet-based software for training and Web conferencing, tumbled the most since 2006 after an internal accounting review delayed the release of its third-quarter earnings.

Saba needs more time to check the accounting of its internal transactions, the Redwood City, California-based company said today in a statement. The company had previously planned to release earnings today after the close of trading. Saba didn’t give a date it expects the review to be completed.

While it’s hard to tell how serious the matter is, investors may be concerned that the review could escalate into a Securities and Exchange Commission probe, said Mark Schappel, an analyst at Benchmark Co. in New York. The shares have climbed 26 percent this year as Saba benefited from a shift to cloud computing, which delivers software over the Internet.

“Sometimes these things turn into not a big deal, and sometimes they can drag out to a full-blown SEC investigation,” said Schappel, who has a buy recommendation on the stock. “That’s the issue here and that’s why the stock is selling off on so little news.”

The shares dropped 18 percent to $9.94 at the close in New York, the biggest decline since June 2006.

Roy Lobo, Saba’s vice president of investor relations, didn’t return a call seeking comment.

To contact the reporter on this story: Sarah Frier in New York at sfrier1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net