"Its says the restatment will show and increase in revenues and earnings. So isn't this sell off overdone?"
Yes, as it always is. The market runs on fear and greed, as soon as they heard the word "restatement" they started dumping. From reading the PR release, and the posts here it actually is not a bad thing.
Its the opposite of Enron, Worldcom etc. They actually made more money than previously thought, or just didnt record it in the right quarter. When all the smoke clears I feel OVTI will be fine. I doubled my position today at 17.77, no worries. This is definetly overblown.
What I worry about is the smoothing out of the revenue to boost growth. If revenue should have been recognized in the prior quarter, then it means growth should have been slower. Growth matters for the stock price of a growth stock. That is why they cannot meet current quarter expections after corrections have been made.
If this is the case, watch for more downward guidances in the future just as TTWO. I hope my guess is wrong, otherwise I will sell after a bit bounce.