Go figure…

Late Friday, Witness Systems (WITS) filed this NT 10-Q which basically said that the company’s Q would be late due to ongoing issues about options granted between 2000 and 2002. The filing noted that a special committee had already estimated $10 million in charges and that its financial results dating back to January 2000 should not be relied upon. Combining that information with a quick scan on Yahoo! shows that insiders have been actively selling for much of the past year, with no purchases, which is never a good sign. And of course, there’s the inability to file a Q on time, which could potentially lead to a delisting, as the company also notes in the filing.

Yet, this morning, Cowen & Co. strangely upgraded the stock to an outperform, sending shares up nearly 5%. Is the analyst at Cowen really that unworried about the late filing and unreliable numbers for the past 5 1/2 years?