Speculation has intensified in recent days as to whether Juniper Networks’ CEO Scott Kriens, and perhaps other senior executives at the company, will survive the company’s alleged involvement in stock-option backdating infractions.
Analysts at Credit Suisse and American Technology Research are among those who have expressed concerns about whether Kriens will keep his job.
Said Credit Suisse analyst Paul Silverstein:
There may be some risk to the tenure of certain of Juniper’s senior executives — most notably to Juniper’s chief executive and founder (Scott Kriens). . . . “His departure would be a significant negative to the stock.”
Meanwhile, American Technology Research analyst Albert Lin said he stopped coverage of Juniper last week because of a number of uncertainties relating to the company. Lin has said . . .
. . . the stock could move radically on speculation about the ongoing leadership of the company and the ability of the stock to remain listed.
Yesterday Juniper revealed that it had received a delisting notification from NASDAQ. The company had expected to receive the notice because of its inability to file its latest quarterly financial report in a timely manner with the Securities and Exchange Commission (SEC). The number-two router vendor said it will appeal NASDAQ’s move to delist the company; pending that decision, the company’s shares will remain listed on the exchange.
In July, Juniper said it discovered discrepancies in its past stock-option granting practices. Earlier this month, the company announced that, as result of the irregular stock-option grants it found, it will need to restate financial results extending back as far as Jan. 1, 2003.
Meanwhile, Cisco Systems, the number-one vendor in the router market and Juniper’s chief competitor, apprised market analysts and investors that, after a thorough review, it did not identify any problems with the way it accounted for stock-option grants to its executives and employees.
Given Cisco’s improving execution in the router market, and its ability to bundle its routers into extensive video and broadband solutions for service providers and carriers, Juniper cannot afford a major distraction. Even with an undivided focus, it had been losing ground to Cisco.