IntraLinks rises as SEC ends investigation

IntraLinks climbs as Securities and Exchange Commission ends investigation

Associated Press

NEW YORK (AP) -- IntraLinks' stock rose to its highest point in nearly two years on Thursday as the technology company announced that an investigation by the Securities and Exchange Commission has ended.

THE SPARK: IntraLinks said late Wednesday that it received written notice from the SEC that the agency ended its investigation and is not recommending any enforcement action against the company. The SEC started its investigation in August 2011, when it asked for certain documents related to IntraLinks' business from Jan. 1, 2011 to Aug. 4, 2011.

THE ANALYSIS: Tom Roderick of Stifel Nicolaus said in a client note that the SEC investigation was weighing on the stock and its termination should be well-received by investors.

Roderick said that IntraLinks had some secondary stock offerings after it went public in 2011. After one of these offerings in April 2011, the company reported disappointing results for its second quarter, and the stock dropped.

It was later discovered that the company lost a meaningful part of its revenue from its biggest customer at the time, the Federal Deposit Insurance Corp., the analyst continued. That was followed shortly by the announcement of the SEC investigation, which Roderick believes may have focused on the company's decision to launch a secondary offering without disclosing material changes to its business outlook.

The end of the investigation means that IntraLinks can now concentrate more fully on its future and may provide an opportunity for the company to look at its strategic options, he added.

Roderick reiterated a "Hold" rating.

IntraLinks is currently in its quiet period ahead of second-quarter earnings, which are expected to be reported on Aug. 14, and could not comment.

SHARE ACTION: Shares of IntraLinks Holdings Inc. gained 65 cents, or 7.4 percent, to $9.45 in afternoon trading. The stock hit $9.36 earlier in the session, its highest level since October 2011.


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