SiliconBeat

Shares of VeriFone were heavily discounted by traders on Wall Street Monday after the biggest maker of electronic-payment equipment used by anyone using plastic to pay for stuff at stores shocked investors by reporting that financial statements for its last three quarters should not be relied on any longer because of accounting issues related to its inventory.
Insiders at VeriFone Holdings have lightened their own inventories of company stock this year by more than $320 million.
Three-fourths of that has been done by GTCR Golder Rauner, the Chicago-based investment firm that backed VeriFone prior to its re-emergence as a public company in 2005. Since then the firm has sold about 75 percent of its VeriFone shares for $700 million. The 8.9 million shares it still owns dropped nearly $200 million in value Monday as Verifone stock fell 46 percent to $26.03 at the end of the trading day.
Douglas Bergeron, the company’s chief executive who told shareholders in a statement Monday he was “very disappointed to have to bring you this news and am committed to ensuring that we promptly and thoroughly remedy this situation and move forward with the business of delivering value” to them, has sold at least 1.4 million shares so far in 2007 through a trading plan set up a year ago. He got $54.6 million for the shares.
To date, few VeriFone insiders have been buyers of their company stock. Three directors have purchased a total of 7,000 shares since its second IPO, most recently a year ago when Alex Hart bought 1,000 shares at $36.78 each.
Perhaps this is a good buying opportunity for a company that saw its net cash from operations grow to $93 million for the first nine months of fiscal 2008, up from $14 million in the same period the year before. Assuming that the cash-flow statements aren’t among the things that end up being restated, that is.