The Irish software company CBT has replaced its two most senior executives in an effort to regain the confidence of investors.
The firm's Nasdaq share price, which had plummeted from $60 to $10 in just three weeks, fell again on the news, but then appeared to steady. It closed last night at $9 5/8, down $3 7/8 on the day.
"Recent events at CBT Group have created a crisis in confidence in the company," said Mr Bill McCabe, who is now back at the company's helm six weeks after he left his post as chairman.
He said CBT's current chairman and chief executive, Mr Jim Buckley, and its chief financial officer, Mr Richard Okumoto, had stepped down from their positions. Mr McCabe - who served as chief executive until late 1996 when he was succeeded by Mr Buckley - and the former chief financial officer, Mr Gregory Priest, along with another member of the board, Mr John Grillos, would now run CBT for the immediate future, he added.
The company, which will report its third-quarter figures later this month, said it would be announcing sales of around $35 million - a rise of 15 per cent on the 1997 period, but well below analysts' expectations. The rush to sell CBT shares began two weeks ago when rumours emerged of weak third-quarter profits.
The company implicitly denied this, but was not believed by investors. Earlier this week it admitted that it had missed out on a $6 million contract, and described sales as "soft". Some $2 billion has now been erased from the company's market capitalisation.
In an interview with The Irish Times last night, Mr McCabe said that CBT's business was "absolutely fundamentally very solid" and that the company continued to make money. He said he regretted the departure of Mr Buckley, but that "something had to give".
"I hope that this will show to Wall Street that the company and its board takes its responsibilities very seriously. We have a lot of work to do - the share price has fallen significantly. But the key issue is looking at the operational performance of the company. That will take time. . .and we're committed to giving the time to it that's needed," he added.
In recent months Mr McCabe, while remaining on the board, had withdrawn from management, and sold some $39 million worth of shares.
"I feel an absolute responsibility and commitment to the company. Everyone is determined to do everything we can to make the company successful," he said. "I will stay as long as it takes to ensure that we get things right."
CBT also said yesterday it had built a poison pill defence against acquisition, adding that it did not know of any specific take-over bid.
"It's securities lawyer stuff to get into the detail, but what we're doing here is putting a plan in place to ensure that shareholders' interests are protected, and that the company is not involved in a predatory takeover at a value way below what we believe to be fair and just for our shareholders," Mr McCabe said.
CBT's stockholder base was until last week dominated by momentum investors, most of whom sold once the share price began to fall, perpetuating the downward spiral. Mr McCabe last night admitted that had CBT been trading on the Dublin market, its stockholder base would have been different. But he would not comment on whether CBT was now considering a Dublin listing.
