COYOTE UNDER SCRUTINY; NASDAQ HALTS TRADING ON WORD THAT COMPANY'S MAJOR CUSTOMER MAY BE FICTITIOUS.Byline: Deborah Adamson Daily News Staff Writer Nasdaq officials halted trading of Coyote Network Systems on Thursday as they look into allegations that the company's biggest customer could be a figment fig·ment n. Something invented, made up, or fabricated: just a figment of the imagination. [Middle English, from Latin figmentum, from fingere, of its imagination. A series of articles published by TheStreet.Com, an online investment site, said its reporters couldn't find Coyote's top client, Crescent Communications. It even dispatched a reporter to the company's Long Beach address, with no success. When the news hit, shares of Coyote plunged by 45 percent to $7.8125 on Wednesday. Officials at Coyote, a telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. equipment and network services company, did not return calls for comment Thursday. The Daily News tried to contact Crescent Communications, but there was no listing for its phone number in Long Beach. Dave Kansas, editor in chief of TheStreet.Com, said his reporters have tried to find Crescent since before Thanksgiving Thanksgiving annual U.S. holiday celebrating harvest and yearly blessings; originated with Pilgrims (1621). [Am. Culture: EB, IX: 922] See : America Thanksgiving national holiday with luxurious dinner as chief ritual. [Am. Pop. . Coyote itself was not much help in locating the company, Kansas and the articles contended. ``We did a lot of exhaustive work on it,'' he said. ``We stand by our stories.'' Coyote defended itself in a press release Thursday, calling the stories ``potentially misleading.'' The company said second-quarter revenues rose to $15.2 million from $106,000 a year ago due to sales of equipment to Comdisco, an established telecommunications company See telecom company. , which then leased it to Crescent. Coyote also said its officers don't intend to short-sell the stock, an accusation A formal criminal charge against a person alleged to have committed an offense punishable by law, which is presented before a court or a magistrate having jurisdiction to inquire into the alleged crime. made by TheStreet.Com after examining Securities and Exchange Commission filings. Vik Grover, an analyst for Kaufman Bros BROS Brothers BROS Benefits and Retirement Operations Section (King County, Washington) BROS Barnes and Richmond Operatic Society (London, UK) . who found himself under fire for his ``buy'' recommendation on Coyote just before TheStreet.Com's articles were released, said that while he has never spoken with any executive at Crescent, he believes it was incorporated in Nevada, based in Long Beach and operates in Mexico as Crescent Communications SA de CV. Grover said he has visited Coyote's operations, which he described as real and valid. He characterized TheStreet.Com's stories as ``disinformation dis·in·for·ma·tion n. 1. Deliberately misleading information announced publicly or leaked by a government or especially by an intelligence agency in order to influence public opinion or the government in another nation: .'' ``It's a ridiculous sell-off. We still remain favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. on the stock,'' he said, although there's no guarantee the recommendation will stay. In September, Coyote announced it was buying a 20 percent ownership stake in Crescent Communications. In the second quarter, Coyote reported a 143-fold increase in revenues from a year ago, largely due to business related to Crescent. As a result, the company's stock doubled to around the $14 range. A Nasdaq spokesman said he is not sure how long trading will be halted, but no shares were traded Thursday. Trades are stopped to protect investors and markets as officials dig for the truth. Comdisco officials did not return calls for comment. |
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