The SEC recently brought charges against Countrywide CEO Mazillo because he mislead investors about the health of his company all while selling shares like craze... talking up the company while bailing out.
The AZO CEO has now doen the same thing.. He stated that the Balanace Sheet is solid all while it has one of the worst debt measures of any public company ans insiders keep selling. Once this goes bad for the stock price, there will be lawsuits and charges filed against anyone who talked this stock up to pull in the little retail investors.
And being that Eddie L is the largest insider at AZO and probably told the CEO to say such things, its possible that Eddie will also be indicted on fraud.
I am also short AZO, but this is really a leap to conclusions and complete speculation. I am sure Eddie L has a team of lawyers informing him on what is leagl and what is not, and what he can get away with and what he cannot. I firmly believe AZO uses borrowed money to buy shares to keep the the share price inflated and this will someday correct itself, but unless one can find evidence of massive SECRET insider buying and selling, there is nothing illegal about this.
As much as I agree that people are totally missing the horrible balance sheet, insiders are not really selling in an out of the ordinary manner, and it is public knowledge that AZO has huge debt. You can look at the balance sheet and determine that. The countrywide thing is totally different because they were maintaining that their loans were good and they werent, and it was not public, so there was no way for an investor to know that what was going on.
You're correct that AZO is a different deal than Countrywide. But Countrywide wasn't controlled by one large hedge fund. AZO is.
Eddie's fund owns enough shares to make the management decisions where as Coutrywide was not controlled the same. Because of this, the law suits will be different for sure but there will be plenty once the retail investors start screaming about a ponzi scam set up by the CEO and Eddie who undoubtable are profiting from their comments.
I'll own at least 1 share so I can join any lawsuits as well.