Quote:
Originally Posted by
Turboguy 
It would be great if everyone could guess everything right but I have a feeling you will be a long time seeing DMND at $ 27.00. I think the runup after the drop off was people seeing a 75% drop in stock and betting on a recovery.
Now I think they will take a harder look. The company is going to face problems with the SEC and possible civil actions although they may avoid that by cooperating. They are going to face tons of class action suits by stockholders since it was fraud that caused the stock to drop. They will have a big penalty from the collapse of the FritoLay deal. The fact is the PE was about average but was it the right PE? Somewhere around 80 million of the profits it booked were due to cooked books. The fact is no one knows what they made the past two years for sure and it will be a while before we do. Its getting lots of bad press and dropped 5% today. I look for a new low tomorrow and it won't be the last for the week. I think you will see at least 18 before you see 27 and 27 won't be for a long time. The bright side is the break up value of the company should be about $ 44.00 a share and breaking it up and selling off the pieces or a takeover might be their best option. Anyway I wish you the best of luck with your calls.
I understand the potential risks here, hence, I don't buy the stocks. Instead, I bought several option contracts that is due in June and these option contracts barely break my profits for this year even if I lose it all. Like you said "The fact that no one knows what they made the past two years..", does it really make sense for stock PPS to drop 37% in a few days. What if the book is not that bad, this stock can easily pop to 10-20% easily. We will see for the next few weeks......
