Tyco Share Price Plunges After Analyst’s Remark

How jittery is this stock market? Investors on Wednesday slammed shares of one of this year’s market darlings, solely on the basis of one bearish analyst’s suggestion of accounting irregularities.

Tyco International shares plunged $6.38 to $97 on the New York Stock Exchange before trading was halted because of an order imbalance. In off-exchange trading, the stock fell to as low as $91.

Tyco is a conglomerate that has been built via $30 billion in acquisitions since 1996. Stellar earnings growth along the way has driven the shares from $45 at the end of 1997 to a recent peak of $107.75.

But on CNBC on Wednesday, longtime market bear David Tice of the Prudent Bear fund in Dallas suggested that earnings may have been inflated by accounting sleight of hand. “Essentially, we said a number of charges taken over the past few years helped, in our opinion, the operating performance,” Tice said.

But he declined to provide a copy of his report or explain his opinion on Tyco in detail.

Late Wednesday, Tyco issued a statement calling the accounting rumors “unfounded and malicious,” and it asked the Securities and Exchange Commission and the New York Stock Exchange to “identify the source of the rumors and take appropriate action.”

Bermuda-based Tyco is the world’s largest maker of security and fire-detection systems and undersea fiber-optic cable, as well as a major producer of electronic components and medical products.