At the begining of last week Taleo announced a restatement of their 3Q results due to revenue recognition issues. At which point the stock dropped from US$12.01 on Friday November 7 to US$7.83 by close on Tuesday November 11.
“Our auditors have asked us to re-evaluate the timing of certain elements of our revenue recognition,” said Mike Gregoire, Chairman and CEO of Taleo. “This is a timing issue, and does not impact the total amount of revenue that Taleo has under contract. Taleo continues to accelerate along many vectors, as we develop innovative new products, penetrate new markets domestically and internationally, and build a platform and community that will define the future of Talent Management. In addition, our customers will continue to receive the same high level of software, services and support from Taleo that they have in the past.”
However things got even worse for them overnight with a class action lawsuit being filed by Johnson & Perkinson on behalf of investors resulting in another 21% drop during trading! Shares are now trading at US$6.05 down from a 52 week high of US$34.20. Not the sort of news the leading Talent Management vendor needs while still trying to digest it’s Vurv acquisition. Interesting Taleo paid US$123 mil for Vurv and their market cap is now at US$190 mil.