Needham & Company Downgrades Marvell (MRVL) to Hold
Needham & Company downgraded Marvell (NASDAQ: MRVL) from Buy to Hold amid the audit committee investigation.
Analyst N. Quinn Bolton commented, "When Marvell delayed the release of its F2Q16 results three weeks ago, we were hopeful the delay was a sign the company was close to announcing a divestiture of its baseband operations. Unfortunately, Marvell announced this morning the delay was due to an investigation by the Audit Committee of its BoD into certain accounting (revenue recognition) and internal control issues (around senior management's operating style). The company also highlighted weaker than expected demand in its HDD controller business, the main profit engine of the company, due to a continued deterioration in the HDD TAM. We believe the combination of the Audit Committee investigation and the continued decline in MRVL's HDD business creates an overhang on MRVL that is unlikely to lift any time soon. Accordingly, we downgrade shares to Hold from Buy."
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Shares of Marvell closed at $10.55 yesterday.