Shares of Irvine chipmaker Microsemi Corp. recovered Friday as Wall Street seemed pleased that the company’s board is backing Chief Executive Jim Peterson, the subject of an ongoing controversy over his education background.
Investors sent shares up about 10% at the close of trading a recent market value of about $1 billion.
The bullish run comes after two days of Microsemi’s stock getting hammered. Shares closed down 25% Thursday.
Late Thursday Microsemi directors said Peterson “has the full support of the board and there are no plans to alter his role as president and chief executive,” Chairman Dennis Leibel said in a statement.
“I want to assure our shareholders that Jim’s educational credentials in no way reflect on the strength of Microsemi, which has been an industry leader,” Leibel said. “The board’s continuing support of Jim Peterson re-affirms our backing of his strategies, operational excellence and proven executive leadership.”
Directors are looking into Peterson’s academic credentials, the statement said.
Earlier Thursday, a Brigham Young University official told Bloomberg that Peterson doesn’t have degrees from the school.
The question of Peterson’s education has sparked days of controversy that has pitted the executive against a San Diego investor known for taking executives to task on their biographies.
The issue erupted earlier this week when investor Barry Minkow released a background check on Peterson that said he doesn’t hold a bachelor’s and business master’s from Brigham Young as claimed on his official biography.
For the past day or so, Peterson has been refuting questions about his resume, while Minkow has been defending his findings.
Minkow’s investing strategy is to short stocks and profit on shares when they fall.
He said he holds a short position in Microsemi.
Minkow “buys a stock and shorts it and then he digs around for information that might put doubt in investors’ minds,” Peterson said.
Microsemi makes chips for industrial, aerospace and military uses.
Peterson, who’s run Microsemi for more than a decade, has said he “categorically denies” misrepresenting the degrees.
He said he suspected a background check with Brigham Young University involved a name mix-up.
“I am working directly with the university to clarify this situation,” Peterson said in a statement. “I have every reason to expect that Brigham Young University will investigate this allegation shortly and officially confirm my degrees.”
Minkow on Thursday told the Business Journal there was no confusion on the name.
“Our report has his right Social Security number and date of birth,” he said. “We never misspelled his name. The school didn’t say, ‘We never heard of him.’ The school said he attended but didn’t graduate.”
In an interview, Peterson described himself as “an active alumni” of BYU who has given money to the school.
Peterson dismissed Minkow, saying he spent seven years in prison for fraud, embezzlement and other financial crimes.
Minkow’s carpet cleaning company, ZZZZ Best, collapsed in 1987, costing investors an estimated $100 million. He was convicted of fraud and several other offenses.
Minkow’s response: “So what if this guy from Microsemi calls me an ex-con. I get that a lot.”
Peterson also alleges that Minkow, a pastor at a church in San Diego, holds a personal grudge against Peterson and his family and is “anti-Mormon.”
“This is the first I’ve ever heard that this guy knows me,that’s crazy,” Minkow said. “When they act in this way and attack the messenger, it’s a red flag.”
Earlier this year, Minkow reported that the president of Herbalife International Inc., a Los Angeles-based distributor of health supplements, misrepresented his educational background on his resume.
It led to Herbalife president Gregory Probert stepping down.
Minkow also fingered Broadcom Corp. executive Vahid Manian, who had overseen global manufacturing at the Irvine chipmaker.
Minkow accused Manian of lying on his resume about degrees from the University of California, Irvine.
Broadcom said it fired Manian on Wednesday.
Minkow told Bloomberg News that he doesn’t hold any Broadcom shares.
