Pixar Shares Drop After SEC Probe Reported
Created 08/25/2005 - 23:00
files/pictures/picture-35.jpgPixar shares dropped after the WALL STREET JOURNAL reported the company is being investigated by regulators over its home entertainment release of THE INCREDIBLES. The informal Securities and Exchange Commission probe is looking to the facts behind Pixar cutting its second-quarter profit forecast in June, stating slower than expected sales of the DVDs.
This investigation is similar to the SEC probe of DreamWorks Animation SKG Inc., which lowered expectations due to lower than expected sales of the SHREK 2 home video release. That incident has spurred DreamWorks to be hit with multiple class action suits, claiming that officials of the company withheld negative sales numbers from investors.
Pixar shares fell $.80 to $42.20 at 10:00 am New York time in Nasdaq Stock Market composite trading and earlier dropped to $41.90. The company had gained 14% over the past year.
A Pixar spokesperson said, "Pixar received an inquiry from the SEC and we believe we have fully complied with that request."