Web upstart causes Utek plunge
The Tampa company's stock drops 36 percent after a scathing report.
By SCOTT BARANCIK
Published October 27, 2006
An unusual young Web site that claims to investigate corporate irregularities has aimed its laser at Tampa-based Utek Corp., publishing a 29-page report that chronicled alleged examples of curious accounting, insider deals and real estate trades.
Judging by Wall Street's rough treatment of the technology-transfer company Thursday, sharesleuth.com scored a direct hit. Utek's stock price plunged 36 percent, losing tens of millions in market value, or $6.86 per share, to close the day at $12.15. Nearly 1.6-million shares traded hands, or about 50 times its average daily trade volume.
Sharesleuth.com, bankrolled by billionaire Dallas Mavericks owner Mark Cuban, debuted in August with an unlikely mission statement: to enrich Cuban by rooting out wrongdoing inside publicly traded companies he has shorted. Investors who take a short position on a stock are betting that its price will go down. The site's first target was Xethanol Corp., a New York-based ethanol company.
Utek's stock suffered collateral damage because the company, which helps investors license or buy university research products, had sold several technologies to Xethanol in exchange for stock.
The sharesleuth.com report published Thursday offered more inferences than conclusions, but author Christopher Carey did report that the "stated values of the stock that Utek received through its technology deals with numerous small companies should be examined closely," as should Utek's financial reports.
Carey said Utek did not respond to requests for comment, and disclosed that Cuban sold short 75,000 shares of Utek's at about $20 per share. The company's stock was up 38 percent this year until Thursday's collapse.
Scott Barancik can be reached at firstname.lastname@example.org or (727) 893-8751.
[Last modified October 27, 2006, 00:33:33]
[an error occurred while processing this directive]