Jefferies Says Don't Jump to Conclusions on Diamond Foods (DMND) Director Suicide, Says Stock Worth $39 in Worst Case
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Price: $37.56 --0%
Rating Summary:
3 Buy, 9 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
3 Buy, 9 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Jefferies commented on Diamond Foods (NASDAQ: DMND) following reports that director and former audit committee member Joseph Silveira committed suicide.
Earlier this month, Mr. Silveira was removed from the committee to avoid a possible conflict of interest.
"While this might be seen as another indication of accounting problems we do not want to jump to conclusions."
Commenting on what the death means, the firm said:
"At first glance this news of Mr. Silveira's death might be seen in connection with the ongoing internal accounting investigation and as another "proof" that DMND will have to report accounting irregularities. Some investors we have talked to have already voiced their concern that the timing of this tragic event would be too coincidental otherwise, and in aftermarket trading the stock lost 17% to $29.02. That being said, we do not know if the death is related to the investigation or if there are other, presumably personal, reasons. Given that Mr. Silveira was not a member of the audit committee anymore and that any personal liability in this matter might have been covered by insurance, we do not think there is necessarily a direct link between the two events. Also, given that the suicide took place over a week ago, one would assume that if there were a newsworthy item back then, it would have been disclosed by now. The fact that the investigation still appears to be ongoing is another reason for us to lean to the view that Mr. Silveira's suicide was unrelated to the investigation."
The firm said their "worst case" DCF value of $39 remains valid. Jefferies is maintaining their Buy rating and $46 price target.
For an analyst ratings summary and ratings history on Diamond Foods click here. For more ratings news on Diamond Foods click here.
Shares of Diamond Foods are down 15 percent in pre-open action to $29.80.
Earlier this month, Mr. Silveira was removed from the committee to avoid a possible conflict of interest.
"While this might be seen as another indication of accounting problems we do not want to jump to conclusions."
Commenting on what the death means, the firm said:
"At first glance this news of Mr. Silveira's death might be seen in connection with the ongoing internal accounting investigation and as another "proof" that DMND will have to report accounting irregularities. Some investors we have talked to have already voiced their concern that the timing of this tragic event would be too coincidental otherwise, and in aftermarket trading the stock lost 17% to $29.02. That being said, we do not know if the death is related to the investigation or if there are other, presumably personal, reasons. Given that Mr. Silveira was not a member of the audit committee anymore and that any personal liability in this matter might have been covered by insurance, we do not think there is necessarily a direct link between the two events. Also, given that the suicide took place over a week ago, one would assume that if there were a newsworthy item back then, it would have been disclosed by now. The fact that the investigation still appears to be ongoing is another reason for us to lean to the view that Mr. Silveira's suicide was unrelated to the investigation."
The firm said their "worst case" DCF value of $39 remains valid. Jefferies is maintaining their Buy rating and $46 price target.
For an analyst ratings summary and ratings history on Diamond Foods click here. For more ratings news on Diamond Foods click here.
Shares of Diamond Foods are down 15 percent in pre-open action to $29.80.
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