PLMD, some info here
PolyMedica Update #3 2:20 PM EST
Oh great, what a day for PolyMedica (and shareholders). This highlights why my fear of the short position prompted me to take a more cautious stance and sell half in our March official bi-weekly Update Line. This just came out from Briefing.com:
<<13:52 ET PolyMedica (PLMD) 26 5/8 -7 1/16 (-21%): -- Update -- Hearing from sources at CIBC World Markets that analyst covering stock has confirmed FBI investigation into billing practices. Allegation is illegal billing for supplies that clients returned, delivery of supplies that were not ordered; and overstocking of supplies. >>
I have been unable to check into this as it JUST came out. I don't even have a thought on it yet except that the company has written company practices and procedures, which it just in the past few months had it lawyers and auditors review and confirm, and this is not in agreement with those practices and my initial hope is that if this is in any way true, that the company is in fact not more guilty of it than the normal day to day mistakes.
Also I note that they only say they hear there is an FBI investigation, not that they hear the FBI has FOUND anything. If it is even true.
Nor does it clearly say that they hear the FBI is at PolyMedica, though that may be implied,
Nor that PolyMedica, is the main or sole focus of their investigation or the reason the investigation was begun. So PLMD is perhaps just being investigated as part of an investigation of the entire industry due to the shenanigans of other bad boys in the industry. And PLMD is just tarred by association for now.
Note the report says "hearing from sources" (which can be just as devastating) as facts in this climate.
I cannot say what the real story is. The company has publicly denied repeatedly any communication with the FBI on anything like this and that it knows anything about it. This was a known risk disclosed in our original report. I still believe anything that comes of it will be immaterial, but I cannot guarantee it. I am just trying to keep you abreast of what I know as soon as I know it.
Perhaps this is what was eatting the stock from the word go today since I think investors were Backwards on the GlucoWatch impact, but I have only just heard about this which came out within the hour.
Again, pardon the typos, speed is of the essence.
from Bi research
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