Marvell Technology's Stock Plunges After Disclosing Accounting Probe

Marvell Technology Group Ltd.'s stock tumbled 16% in premarket trade Friday, after the semiconductor company disclosed in a regulatory filing that it was conducting an internal investigation of certain accounting and internal control matters. "The investigation consists of a review of certain revenue recognition issues in the second quarter of fiscal 2016 and any associated issues with whether senior management's operating style during the period resulted in an open flow of information and communication to set an appropriate tone for an effective control environment," the company stated in the filing. Specifically, the company said it was focused on 7% to 8% of revenue recognized that would have been received in the third quarter. The company said it sees preliminary fiscal second-quarter revenue of $711 million and a net loss of 74 cents a share, compared with year-earlier revenue of $962 million and earnings per share of 27 cents. Marvell said the results reflect weaker-than-expected demand for certain products, particularly in the storage market, as a result of a weaker global economy and a slow down in the PC market. The stock, which is on track to open at the lowest level since January 2013, has lost 27% over the past three months through Thursday, while the S&P 500 has declined 7.4%.