RE: CREE
Catching the falling knife, eh? I read about the lawsuit and was initially surprised it would have this much effect upon the stock price. Then I noticed the Reuters story containing the following: It also charges that Neal Hunter and brother Jeff Hunter, then chairman of an affiliated company, set an undisclosed agreement that helped artificially boost Cree's operating income and the per share value of its stock. bigcharts.marketwatch.com{820801D0-8FF9-400C-9330-626720583CF2}&newsid=805085645&symb=CREE&sid=9939
I Googled Jeff Hunter and noticed the following 3 year old story in Goggle's cache mentioning Jeff's silicon carbide jewelry company, Charles & Colvard [CTHR] biz.yahoo.com, and its dealings with Cree.
The part I have highlighted is:
What's interesting is if one goes through the contracts between Cree and Charles & Colvard, one would see that Charles & Colvard bought about $35 million of goods in a 43-month period.
Now, think about Cree spinning off C3 through a public offering and raising $41 million for the company.
Does that not mean that Charles & Colvard shareholders essentially helped Cree build up a revenue base as they invested in the IPO and subsequent rounds?
216.239.51.100
I'd be interested in your take in any of this. I'm not sure that I would want to catch the falling knife in this situation because it is quite likely that the SEC will now have to get involved and do their own investigation, as may class action attorneys, even if the parties were to settle out of court, particularly as the suit charges:
The complaint alleges that between 1995 and 2003, Cree and Neal Hunter filed false statements with the U.S. Securities and Exchange Commission relating to public stock offerings, omitted information from earnings statements, and misled auditors concerning officers and directors' pay.
bigcharts.marketwatch.com{820801D0-8FF9-400C-9330-626720583CF2}&newsid=805085645&symb=CREE&sid=9939
Therefore I will wait for these additional shoes to drop before considering a purchase.
Sam |
