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Biotech / Medical : The Stock for 1999(Polymedica)PLMD(Medical Supply Co.)
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To: Sam who wrote (3176)11/22/2000 10:19:19 AM
From: Apakhabar  Read Replies (1) of 3414
 
The article didn't actually claim to quote somebody from the FBI...it was all indirectly gained from the Health and Human Services, I think. It sounds like some irregularities have been discovered, and bcause PLMD has 80% of the market, they all just figure PLMD must be involved.

The thing that struck me was just how much of a hatchet job this article became. It's one thing to have a story about possible Medicare fraud and an FBI investigation. I mean, that's a BIG story! So why all the stuff about the accounting, and finally, the insider selling? The expensing surely is an issue to shareholders, but one quite separate from fraud. And the insider selling-- please, that's SOP for everybody.

I think the market is responding rationally to the article. It was a devastating allegation and cutting the stock in half is exactly what happens these days. Now the stock has come up six or seven points, reflecting the doubts about Barron's credibility and some weak confidence in the company for announcing the buyback.

It would be ironic if the accounting issue ends up being the real story, wouldn't it? I mean, even if PLMD gets cleared of the Medicare charges, the stock probably will have a difficult time getting back to its highs because accounting issues invariably attract genuine "long-term" shorts.

Looks like the shares you bought yesterday are going to pay for your holidays at least, should you get tired of the uncertainty and simply take a profit. Good job.
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