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BakBone Slip Called Temporary

Analysts dont expect BakBone Software Inc.'s (Toronto: BKB) recent earnings restatement to stop its plans of getting listed on the Nasdaq.

BakBone’s shareholders on May 17 approved a reverse split of up to 5-to-1 in an attempt to raise the company's trading price to get listed. BakBone currently is traded on the Toronto Exchange, but cannot be listed on Nasdaq until it achieves a minimum bid price of $5.00 per share (see BakBone Calls a Reverse). After dipping a bit after news of the restatements, BakBone’s stock was at $2.07 near the close today.

“We anticipate further share price gains as BakBone continues to penetrate the $2.4 billion backup market,” analyst Brion Tanous of Merriman Curhan Ford & Co. wrote in a research note today.

That was in agreement with reaction last Thursday after BakBone said it had to restate earnings as it moves to U.S. GAAP standards from Canadian GAAP. “Bakbone is positioned well to continue to take share in the storage software market,” Bradley Mook of Emerging Growth Equities wrote. “We believe its Nasdaq listing and business ramp over the next few quarters will draw investors' attention.”

Bakbone’s revenue from its first three quarters of fiscal 2004 were adjusted down after several large contracts were recategorized as deferred revenue. Also, the company did not properly take into account deferred stock-based compensation charges when it reconciled from Canadian GAAP to U.S. GAAP for its fiscal 2002 and 2003.

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