Verity appears to be sinking into ever deeper hot water.
Last week the Internet search engine developer warned that its first-quarter revenues would fall by 40% and that it expects to make a "substantial" loss for the period, which ended 31 August.
Verity's share price dropped 21% on release of the statement. Its shares have plummeted to around a sixth of their price a year ago, prompting speculation that a takeover may be on the cards.
"If anyone wants to buy Verity, they'll pop up now," predicted Robin Bloor, CEO of Bloor Research. "It's quite difficult to see who that might be, though IBM might want to pick it up."
Don McCauley, Verity's chief financial officer, agreed that the share price made his company look like a takeover target but added: "I don't know of anyone targeting us at the moment." He emphasised that the company does not want to be acquired.
The company forecast that first quarter revenues would be $5.3 million (#3.3 million) for the quarter, down 40% on the $8.8 million reported for the same quarter last year, and a decline of 52% from last quarter's revenues of $11.1 million.
McCauley blamed management disruption for the losses, insisting that it is not a product or market-related problem.
The company's founder and CEO resigned in July and was replaced almost immediately. "We were very distracted by that and took our eye off the ball," McCauley concluded.
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