Saba Software, Inc. (OTCMKTS:SABA) recently disclosed that it had received a number of non-binding buyout offers. The management highlighted that the buyout indications that they have received came with price offers above the current market price. The fact that the indications are non-binding suggests that there is no guarantee of a deal happening at the end of the day.

Analyst help identify trailing stop-losses for both long and short position in SABA.

Saba Software under investigation

Even though the buyout indications may not happen, investors in the stock look impressed with the news. However, there are issues of concern in the stock. A law firm called Robbins Arroyo LLP announced that it was investigating Saba Software, Inc. (OTCMKTS:SABA) and certain of its officers for possible breach of fiduciary duty. The firm seeks to provide a legal opportunity for the shareholders to sue the company for compensation in case the alleged fraud in the company affected them.

$1.75 million fine for fraud

The U.S. Securities and Exchange Commission charged two former executives of the company with fraud. Saba Software, Inc. (OTCMKTS:SABA) agreed to pay SEC $1.75 million to settle the issues of falsification of documents that was done to create an impress that the company met its quarterly performance target.

The SEC further required the company’s former CEO, Babak “Bobby” Yazdani, to reimburse Saba Software, Inc. (OTCMKTS:SABA) $2.5 million. He received the amount in bonuses and other gains during the period of the alleged fraud

Shares of Saba Software, Inc. (OTCMKTS:SABA) started 2015 on a positive note and are up almost 32% so far this year. However, at about $8.70, shares still trade at nearly half of the 52-week high.

Technicals

Saba Software, Inc. (OTCMKTS:SABA) is one of the most volatile stocks in the exchange with its long term uptrend marked by huge pullbacks, deep enough to drive most of the conservative investors away but the aggressive speculators interest always made the stock hitting new highs almost every year. The latest correction has most probably ended after getting support from a very strong confluence area of support as seen on the chart but that must be confirmed with a monthly closing above $9.50 levels.

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