Pixar probe reported
SEC opens informal investigation of studio
By Paul Sweeting -- Video Business, 8/26/2005
AUG. 26 | The Securities and Exchange Commission reportedly has opened an informal investigation of Pixar Animation over the studio’s disclosure of its second-quarter results after suffering higher-than-expected DVD returns of The Incredibles.
The agency’s interest in Pixar apparently was spurred by its own investigation of DreamWorks Animation, which absorbed returns that similarly were heavier-than-expected on Shrek 2, the Wall Street Journal reported.
Pixar officials had no immediate comment.
Both investigations are dubbed informal, and the agency hasn’t invoked its subpoena power.
On June 30, Pixar said it would miss its second-quarter earnings forecast because it had underestimated Incredibles returns (VB, 7-4). At the same time, it said overall DVD and VHS sales of the title had fallen about 7% short of expectations.
News of the SEC investigation knocked more than $1 off Pixar shares on Aug. 26.
Prudential Equity Group analysts Katherine Styponias and Aaron Bearce said in a research note that “there is too little public information at this point to draw any meaningful conclusions,” and maintained their “overweight” rating on the stock.
