More poking and prodding…

February 9, 2004

UPDATE About 45 minutes after I posted this, WebMD put out a press release announcing the SEC investigation. In the release, WebMD CEO Roger C. Holstein said, “The SEC’s involvement in these investigations is customary and we do not view their involvement as an expansion of the initial investigation in any way.” Give them points for making an announcement, instead of burying it in a filing.

In an amended registration statement filed by Internet healthcare company WebMD (HLTH) on Friday, the company disclosed that it was now the target of a formal SEC investigation. The one sentence disclosure was included in the risk factors section as part of the company’s disclosure on an investigation begun by the US Attorney’s office in South Carolina. The company said it believes that investigation is related to a former unit of Medical Manager Corp., a company WebMD purchased in September 2000. On September 3, 2003, FBI and IRS agents executed search warrants at WebMD offices in Florida and at its New Jersey headquarters. After a brief suspension of trading on the day of the raids, the stock dropped about 20 percent. But lately, it’s been attracting some new fans. On Friday, on Wall $treet Week with Fortune, T. Rowe Price fund manager Kris Jenner said he liked the stock.

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