5 Companies That Had A Rough Week

The Week Ending May 5

Topping this week's roundup of companies that had a rough week is solution provider PCM, which discovered that it may not have gotten what it expected when it bought En Pointe.

Also making the list this week were IBM , which was hit by financial bad news on a couple of fronts; AMD, for suffering its biggest stock price plunge in more than a decade; Intel, which scrambled to issue an alert about a critical vulnerability in its remote management technology; and Polycom, which lost a key marketing executive.

Not everyone in the IT industry was having a rough go of it this week. For a rundown of companies that made smart decisions, executed savvy strategic moves – or just had good luck – check out this week's Five Companies That Came To Win roundup.

PCM Claims En Pointe Overstated Profits Before Acquisition; Stock Drops After Allegations Revealed

PCM's stock took a dive this week when word got out that the company, in a lawsuit filed last month, said it would not have acquired En Pointe's assets in April 2015 had it known its true financial situation.

PCM, in the lawsuit filed April 11 and brought to light in a Seeking Alpha article this week, alleged that En Pointe materially overstated the profitability of its business and that breaches by an En Pointe subsidiary have damaged PCM's goodwill with many customers.

PCM said its financial damages exceed $57 million – more than triple the company's 2016 net income. As a result, PCM's stock (traded on the Nasdaq exchange) plunged nearly 26 percent between the opening Bell Monday and Thursday's close.

IBM Hit With Moody's Downgrade, Warren Buffet Sell-Off

IBM's financial reputation took a pair of hits this week, including a downgrade in its debt rating by Moody's Investors Service, and word that billionaire investor Warren Buffet has sold about a third of his stake in IBM.

On Wednesday, Moody's lowered its rating on IBM's unsecured notes to "A1" from "Aa3." The downgrade "reflects the transformation and high level of investments which have negatively impacted IBM's profitability and cash flow, as well as concerns that IBM will remain challenged for a longer than previously anticipated time to grow total revenue and return to the margin profile achieved prior to 2016," the MarketWatch website quoted Richard Lane, a Moody's senior president, as saying.

On Thursday, news got out that Berkshire Hathaway, the conglomerate led by Buffet, has sold about one-third of the stake it held in IBM, about 25 million to 30 million of the 81 million IBM shares Berkshire Hathaway owned at the end of 2016, according to CNBC.

Perhaps the biggest slap against IBM were comments Buffet made to CNBC, saying he doesn't value IBM the same way he did six years ago when he started buying it and that he had "revalued it somewhat downward."

AMD Stock Suffers Biggest One-Day Drop In 12 Years

Chipmaker AMD reported first-quarter earnings Monday that were largely in line with expectations. But concerns about the company's profit margin outlook sent is stock price tumbling in its biggest drop in more than a decade.

After closing at $13.61 per share Monday, AMD share prices fell more than 24 percent to $10.31 at the close of trading Tuesday – the biggest one-day drop since Jan. 11, 2005, according to MarketWatch.

By Wednesday, the stock had fallen to $9.88 per share before rallying a bit to get back to over $10 on Friday.

Before this week, AMD's stock had nearly tripled in value over the last year or so, gaining more than 28 percent in this year's first calendar quarter alone.

Intel Issues Advisory On Critical Flaw In Its Remote Management Technology

Intel scrambled this week to alert computer operators about a critical flaw that enables attackers to take full control of enterprise computers running on vulnerable networks.

On Monday, Intel said there is a critical flaw in the remote management features of processors in the company's Active Management Technology, Intel Small Business Technology, and Intel Standard Manageability technology.

Intel said it was not aware of any exploitation of the vulnerability and said it had developed a firmware update to address the problem. It said it was working with equipment manufacturers to make the update available as soon as possible.

Polycom Loses Key Executive To Intermedia

Good employees are hard to find – or hang onto, as Polycom found out when it lost its top marketing executive to cloud business application provider Intermedia this week.

Intermedia hired Jim Kruger (pictured) as its new chief marketing officer. He will be tasked with building up the company's name recognition around channel partners and customers to help accelerate growth. He's also expected to drive hosted VoIP sales and facilitate Intermedia's expansion into the United Kingdom and Australia.

Kruger spent 16 years at Polycom, most recently overseeing the company's $60-million, 160-employee marketing operations.