Olivetti Stock Drops 20 Percent After Two-Day Suspension
MILAN, Italy (AP) _ Olivetti stock fell 20 percent on Monday as it resumed trading after a two day suspension prompted by doubts about the validity of the company’s latest financial statement.
After a meeting Friday with Olivetti executives, officials of stock market regulatory agency Consob asked for further details on the first-half results by the end of Tuesday.
Uncertainty about the numbers led to negative speculation about the company that dominated trading Monday.
``A fundamental analysis doesn’t make any more sense on Olivetti until we are sure of (the) figures we’re working on,″ said Marco Nascimbeni, an analyst with Carnegie International in Milan.
After the ouster last week of Chairman Carlo De Benedetti and the announcement of first-half losses of 440 billion lire, worries about the company intensified. Director General Renzo Francesconi resigned and suggested the loss underestimated the company’s plight.
Olivetti’s new chairman, Francesco Caio said Friday that the company’s first-half results were drawn up according to strict accounting principles.
There are also questions as to whether the government might get involved at some point, or what role bank lenders might play. Italian unions have been clamoring for the government to intervene due to fears that a new round of restructuring could cost thousands of jobs.
``It looks very difficult to find a solution,″ Nascimbeni said.
The shares lost 150 lire to close at 600 after being halted several times for excessive losses. Analysts noted that Olivetti’s book value stands at 567 lire per share.