Cyber Security Giant Symantec Experience Turbulence in Stock Market

Symantec Corp shares lost a third of their value after the cyber-security firm disclosed its board`s audit committee was investigating "concerns" raised by a former employee and that it might have to restate results.

The stock, down $9.56 at $19.62 on Nasdaq, shed roughly $6 billion in market value, its steepest decline since 2001. At least nine analysts downgraded the stock.

Symantec disclosed the whistleblower probe late on Thursday, saying it might miss a deadline for filing its annual 10-K report, may need to restate some financial results and might revise guidance.

"This may be far from over," Moffett Nathanson LLC analyst Adam Holt said in a note to investors, cutting his recommendation on the stock to "sell."

Symantec Vice President Cynthia Hiponia told analysts that the probe began “in connection with concerns raised by a former employee.” She did not say whether that person had approached Symantec or raised the issue with securities regulators.

She added that the company had voluntarily advised the U.S. Securities and Exchange Commission that it was investigating the matter.

A spokeswoman for the SEC declined to comment.

Sean X. McKessy, a former chief of an SEC program that rewards whistleblowers for turning in firms that violate U.S. securities laws, said the warning of a delay in filing the 10-K suggests that the issue is related to accounting practices.

He said the SEC has likely begun an informal review of the matter, but would likely wait to see results of the company`s probe before deciding how to proceed.

"While this may all amount to nothing, this is undoubtedly a serious matter, and it could be a while before transparency and investor confidence improves," analysts at Cowen & Co said in a note to investors.

Cowen also noted it was "shocking" that Symantec had scrapped the question-and-answer portion of its conference call with analysts following its quarterly earnings report on Thursday.

Symantec Chief Executive Officer Greg Clark and the bulk of his senior management team have been with the 36-year-old company for about two years, joining from Blue Coat Inc, which Symantec acquired in August 2016.

Symantec on Thursday also issued an annual outlook that was below Wall Street`s expectations.