This class-action suit alleges a cheesy lack of class

This class-action suit alleges a cheesy lack of class

The other day I grabbed an old press release from the back-burner pile on my desk and put it to good use. Although I am, as a rule, charmingly agile, I had dropped a wad of cream cheese from my bagel into my keyboard, and I needed something to use as a scooping device to remove the bit that was wedged stubbornly between the E and R keys. The press release, with a couple of well-placed creases, did the trick.

As I was discarding my cream-cheese smeared press-release-cum-origami-scoop, I noticed that it happened to be an Informix Software release. "Informix Universal Server Ships On Schedule," the headline read. It was disarmingly fitting, because I had picked up the release in New York last December at the big Universal Server launch event. I've been on this bagel-and-cream-cheese kick ever since that visit to New York, so it seemed - to stretch the bagel metaphor - I had come full circle.

Memories of that New York jaunt came flooding back, and I was reminded that the most entertaining thing about New York is the New Yorkers. I can remember checking into this fancy hotel in the heart of Manhattan. When I gave my name to the lady at the reception desk (who never bothered to look up), she tapped away on her terminal and suddenly rolled her eyes and groaned dramatically.

"Informix," she sneered, referring to the company whose name had obviously appeared on her screen - they had booked the room for me and were picking up the tab. "I bought them when they were 32. What are they now, like, 17?" She shook her head in disgust and gave me my room key. As I shuffled off to the lift I wondered how many New York hotel desk clerks dabbled in tech stocks on the side.

Now, four months later, I wonder what that receptionist would say if "Informix" popped up onher screen again, given that Informix shares are trading, at this writing, at around 7 and loose change. I can't help but wonder, moreover, if she is getting a piece of the action - class action, that is - against Informix.

In case you haven't heard, on April 14 a class action suit was filed against Informix "and certain of its officers and directors", alleging misrepresentations, false financial statements and insider trading.


The cream cheese hit the fan on April 1 when a sheepish Phil White, Informix's CEO, conceded that revenues for the quarter ended March 31 would be approximately $US100 million below analysts' expectations. That sent Informix stock into a nosedive, to as low as $7.125 per share, and White was properly contrite.

It was a stark contrast to the exuberant Phil White who stood on a glitzy New York stage in December and declared triumphantly that Informix had kept its bold promise and delivered the Universal Server before the end of 1996, leaving arch-rival Oracle to wallow in its outdated non-object technology.

What White was forced to acknowledge earlier this month, however, is that Informix had been blinded by the spotlight. Everybody got so caught up in the Universal Server hoopla that they forgot what it was that was really paying the bills - Informix's core OnLine relational database business. The "reinvented" company had taken its eye off the ball.

The class-action suit, which was filed in California on behalf of shareholders who purchased Informix common stock during the period April 16, 1996, to March 31, 1997, charged that Informix "and certain of its officers" violated US securities laws by making misrepresentations about Informix's business, earnings growth and prospects for future profitability. It also alleged that Informix reported false financial results by artificially inflating reported revenues when it knew, among other adverse factors, that its distribution channels were filled to excess.

Even uglier, the suit alleges that individual defendants sold off approximately 960,000 Informix shares while in possession of adverse information that was not available to the general public, at prices ranging from $US19.75 to $US26.50 per share.

If you were an Informix employee and you were holding a bunch of Informix shares with all these allegations about the nasty dealings of the folks upstairs in the executive suite flying around you, you might be even more annoyed. So annoyed, perhaps, that you'd be inclined to leave the company and work for one of Informix's competitors.

Remember that team of 11 developers in Portland, Oregon, who left Informix en masse in January and joined Oracle? I wonder if they knew something even then that the rest of us didn't know. Truth be told, up to this point I figured Oracle probably baited them. Now, I'm not so surrrrrrrrrrrrrrrreeeeeeeeeeeee.

Sorry. My E and R keys keep getting stuck. Guess that Informix Universal Server release didn't do the trick after all.

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