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Actionable news in MRVL: Marvell Technology Group Ltd.,

How Worried Should Marvell Holders Really Be Over PwC Auditor Withdrawal?

Marvell Technology Group Ltd. (NASDAQ: MRVL) is not a stock that most investors expect to see down almost 15% in just one trading session. Unfortunately, Tuesday was no normal trading session. An SEC filing showed that PricewaterhouseCoopers (PwC) has resigned as the firm’s external auditor. With as much as shares were already down from highs, this only creates more confusion and more fear.

Marvell said that PwC’s audit reports on its consolidated financial statements as of and for the fiscal years ended January 31, 2015, and February 1, 2014, did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle. Additional information in the SEC filing showed that, on October 20, 2015, PwC advised the Marvell’s Audit Committee of its board of directors of PwC’s resignation as its independent registered public accounting firm, also effective as of October 20.

Marvell said that the Audit Committee did not request, recommend or approve the resignation of PwC. In short, this was a surprise all the way around.

Marvell shares were last seen down 15.3% at $8.00, and its new 52-week low is $7.55, with a 52-week high of $16.78. Marvell had traded a whopping 34 million shares as of 12:00 a.m. Eastern Time on Tuesday. That is more than four times the normal trading volume.

Marvell’s May 2, 2015 balance sheet showed cash and short-term investments of $2.5...