Cash payment was made and why and how it was made is the real issue...stocks's precipitous decline is unwarranted and acting as if cash had been stolen or misappropriated...this is NOT the case. We could be witnessing one of the greatest short squeezes of all time...completely nuts for the stock to lose 60 points over a dinky accounting issue...this is NOT Enron or MCI Worldcom...too many are oblivious to the facts...love DMND's products, taste great..just look at the growing top line. enough said.
management will have to address the accounting on the Dec earnings call...optimistic that they will finally clear the air..any and I mean any hint or mention the board has found no accounting improprieties or wrong-doing, the stock will soar...also want to hear Pringles is committed to getting the deal done...again, I think some hedge fund short is trying to blow this accounting issue out of proportion and probably made a killing on the short position..a good example of this is SPRD and muddy waters short (SPRD got goosed down to as low as $8.00 in the summer and now trading at one point on Friday at $29.00)...investors need to stick with the facts..facts are consumers are buying DMND's products and proof of this is revenues continue to increase year over year...
Given there was a healthy short interest in DMND a few months back, I'd say (most) shorts have done quite well! Yes, there could be a good short squeeze assuming a positive catalyst. As far as the catalyst being Pringles, that will be a few months away. It will be interesting to hear what management has to say next earnings release (re earnings going forward and re Pringles and re accounting "issues"). Given that DMND will be buying Pringles with DMND shares, there's a possiblility that DMND may have to pay more shares to close the deal. IF the deal closes, DMND will also look like a very different company with a lot more debt. I'm long PG. No position in DMND, but if I do take a position, it will be a long position.
"completely nuts for the stock to lose 60 points over a dinky accounting issue"
In hindsight, it may have been "completely nuts" for DMND to have traded up to the 90's!
Perhaps there's more than a "dinky accounting issue". How about loss of confidence in management? How about those who recently bought DMND solely on the proposed Pringles purchase--this would elevate DMND to the number two spot of snack food companies--who are exiting, since the purchase is now seen as maybe not happening? Given that DMND shares have plummeted, how much more will it cost to buy Pringles (partially using DMND shares as currency)? There are a few question marks surrounding DMND; question marks that didn't exist just a few weeks ago! Granted short sellers (WHO HAVE DONE WELL) and perhaps newer longs who have sold, have pressured the share price...too much? Time will tell. Haven't seen a dead cat bounce yet. IMO, there's more than just a "dinky accounting issue" that is currently affecting DMND. Stocks trade on fundamentals, but also on perception. I'd say investor perception of DNMN has changed for the worse. This may be temporary. Time will tell. Interesting to watch.
P.S. whoever is posting "buyout" posts: thanks for the humor.