VMware Discloses SEC Investigation Into Backlog; Shares Fall 10%

   By Maria Armental

VMware Inc.'s stock hit a 52-week low a day after the company disclosed a regulatory investigation into its backlog.

The stock traded as low as $121.61 on Friday before recovering slightly to $122.31, down 10% for the day.

The software company, which is majority owned by Dell Technologies Inc., said the Securities and Exchange Commission in December requested the company turn over a series of documents and information related to its backlog and associated accounting and disclosures.

VMware, which said it was working with regulators, didn't give any other information, such as the period of time covered by the requests.

A company representative, reached by telephone Friday, declined to comment beyond the statement.

The probe was disclosed as VMware reported for the quarter and year ended on Jan. 31 that showed $18 million in total backlog, largely from orders held due to export requirements.

License backlog at quarter's end, it said, was $5 million.

While the amount and composition of backlog may change significantly from period to period, the bulk of VMware's backlog is typically linked to license revenue that it expects to recognize during the following quarter, according to the company's past regulatory filings.

VMware is yet to file its latest annual report with the SEC.

The company's longtime auditor is PricewaterhouseCoopers LLP.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

February 28, 2020 14:49 ET (19:49 GMT)

Dell Technologies (NYSE:DELL)
Historical Stock Chart
From Aug 2024 to Sep 2024