Prices for Diebold stock shares are soaring out of the 7-year basement this morning, where they have been sitting for the past several months since a coordinated insider sell-off by a dozen or so officers on the very same day last August, when the stock had been near its 52-week high at $53.04/share. Within days after the sell-off, the company renamed its humiliated Diebold Elections Division to Premier Election Solutions, and the stock has been falling, some 50% in total, ever since. Until today.
Yesterday, the New York Times reported a take-over attempt of the entire company by defense contractor conglomerate United Technologies Corp. (UTC). The initial $3 billion hostile bid to buy Diebold at $40/share is "a 66 percent premium over Diebold’s Friday closing price of $24.12," according to the Times' report.
As of 2pm ET today, Diebold's share price has soared some 60% to more than $38/share.
Diebold's board had unanimously rejected a similar offer from UTC two years ago, and the company once again rebuffed a private offer in February, requesting that United Technologies "refrain from contacting any of its directors." Over the weekend, UTC went public with its offer, which has both Wall Street and Election Integrity advocates abuzz.
As The BRAD BLOG has covered in detail over the years, Diebold, the 150-year old company and second largest American manufacturer of faulty, hackable, error-prone voting systems, faces myriad financial and legal problems.
It is currently under investigation by the SEC, under investigation by the DoJ, is facing a Securities Fraud Class Action suit, was recently forced to restate earnings to admit that it had overstated its election business in 2007 by some 300% in the wake of report after report showing its voting systems to be failures, leading a number of states to decertify many of their voting machines. Last month the firm announced planned layoffs of 5% of its workforce, some 800 employees, as its share price continued to dive. As well, the company may be facing still more fraud suits and liabilities in the future in the wake of problems and failures with its voting machines found with alarming consistency in state after state.
The UTC offer seems like a difficult one for Diebold's board to justify turning down, at least to shareholders who have lost so much of their investment value in the company over the past six months, even though it has alarmed Election Integrity advocates, who are troubled to see yet another defense contractor encroach on the business of America's public electoral system...