Web.com shares fall after short-seller report
Oct 30 (Reuters) - Web.Com Group Inc's shares fell as much as 12 percent after a research group said the internet domain name registrar had changed past financial statements ahead of a debt offering and called for a probe by the U.S. Securities and Exchanges Commission.
Copperfield Research said Web.Com revised its financial statements eight months after they were first reported and four months after its audit to allow for a "beat" of consensus estimates amounting to a violation of the Securities and Exchanges Act. (link.reuters.com/cyr34v)
Copperfield Research, the pseudonym of a group of anonymouse researchers, said it has a short position on the stock that it claims is worth just $6, 80 percent lower than Web.com's closing price on Tuesday.
Web.Com could not be immediately reached for comment.
Short-sellers make money when a stock price drops. They sell borrowed shares in the hope of buying them back at a lower price, returning them to the lender, and gaining from the difference.
Copperfield said Web.com "is a stagnant business and possibly even in decline."
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