March 29 (Bloomberg) -- Saba Software Inc., 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.
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