Nvidia, Wind River to delay quarterly filings
SAN FRANCISCO -- Computer chip maker Nvidia Corp. and software maker Wind River Systems Inc. both warned yesterday that they will miss government-mandated deadlines for filing their most recent quarterly reports, joining a long list of tardy tech companies scrambling to clean up a stock option mess.
The delay will expose both Nvidia and Wind River to being dropped from the Nasdaq Stock Market. But that process takes several months, giving the companies time to comply with the Securities and Exchange Commission's reporting rules before getting bounced from the exchange.
Like dozens of other companies, Nvidia and Wind River are reviewing whether they properly accounted for past stock options awarded to its employees. Both companies disclosed internal investigations last month.
Many companies with stock option problems aren't filing quarterly reports with the SEC until they straighten out their finances. The list of other high-tech companies that have recently missed the SEC's filing deadlines because of stock option woes includes Broadcom Corp., Apple Computer Inc., Cnet Networks Inc., Juniper Networks Inc., Rambus Inc., and VeriSign Inc.
Nvidia's inquiry already has found the timing of some stock option awards were incorrectly recorded. The company is now trying to determine if it needs to wipe out some of its previously reported profits.
Meanwhile, the SEC has asked Nvidia to provide more details about its stock option troubles, the company said yesterday.
Wind River's audit committee is still examining whether the company mishandled any of stock options. If trouble turns up, Wind River also may have to revise financial statements.
Investors took Monday's news in stride. Nvidia shares rose 43 cents, or 1.5 percent, to close at $28.13. Wind River gained 5 cents to $10.75.
Troubles similar to those facing Nvidia and Wind River are widespread. The SEC is investigating more than 100 companies for the possible manipulation of options.
The government investigations are focused on a practice known as ``backdating." This occurs when stock options are issued retroactively to coincide with low points in a company's share price -- a maneuver that increases the potential windfall for the recipient.
Backdating isn't necessarily illegal as long as the costs are fully disclosed and reflected on the books.
