My Home     About Me

LDK (LDK) a maker of Solar Panels is attracting the attention of the litigation types. LDK which in the past week has seen its stock drop dramatically after a senior financial type suddenly resigns saying the inventories are mispriced. Asensio issues an email that was not immediately encouraging for existing investors. Barrons is warning investors that all is not well. Just yesterday the Law Offices of Eric J. O'Bell, L.L.C. announced initiation of an investigation into LDK Solar Co.

Piper Jaffray issued a note last week saying that the inventory problems are over stated. Piper Jaffray was accused of Blodget like behaviour. No one listened as the stock dropped like a stone. Blueshirt an investor relations company in their recent Sep newsletter listed LDK as a shiny new client. (Hey who brought that account in?)

OK its a mess. This is a Chinese company that is solely listed on the NYSE, which should count for something. The resignation/termination was not the smoothest move by either party. Crunch date was supposedly Sep 25. Charley Situ the former well placed employee sent emails to everyone causing the public perception of a problem. He was only hired in March of 07.

You have to question managements handling of the situation. From LDK's press release of Oct 4 they claim to have immediately done a physical count of the inventory and not found any material inconsistencies. LDK goes on to state that an independent audit firm has been hired to investigate and that they will report its findings once the boards audit committee reviews the report. They did not mention who it was. (Widely believed to be KPMG)

There seem to be credible reports that the recent scrap rates at the plant are unacceptable. The finger was pointed at purchases of poor quality raw materials. Hence Charley Situ's comments.

The real question is not the inventories. One day, hopefully soon,they will be sorted out. If Charley Situ's superiors leaned on him so hard that he was forced to resort to desperate whistle blower tactics, can you trust LDK's management.

Emini's Nas 100   emini's S&P 500   VIX   $SOX   Semiconductor Index   Oil Service HOLDR (OIH)   Gold ETF (GLD)   ETFs (exchange traded funds)   Deron Wagner   Morpheus Trading   S&P 500   Nasdaq Composite   Dow Jones Industrial Average   Support/resistance levels   stock market technical outlook   emini's   Emini S&P 500   ES   Nasdaq 100   Head and Shoulders Top