Restating earnings hurts the company itself, and its peers
When one company restates earnings, best to see what its peers are up to.No company wants to issue an accounting restatement; it’s a guaranteed way for the share price to drop 10 percent, on average. Investors, analysts and journalists alike view restatements as an indication of a problem within the company. As it turns out, restatements indicate that there is value in looking at its industry peer firms. More…
Shareholders lose when companies are sued for inflated stock prices
When investors buy stock at inflated prices, they have a right to sue the company for any losses. Unfortunately, securities litigation isn’t paying off for shareholders – even when they win. Instead, large institutional investors and lawyers rake in the money and existing shareholders end up losing out.