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DEVASTATING
NEWS FOR HARMON INVESTORS
October
11, 2007 |
Recently, everything has been unraveling for investors of Harmon International Industries, Inc. (NYSE HAR). Since September 20, 2007, its stock has dropped almost one third in value. Not surprisingly, investors have taken action against the Company for alleged violations of federal securities laws.
On September 21, 2007, the Company shocked the market and announced that Kohlberg Kravis Roberts & Co. L.P. and GS Capital Partners VI Fund, L.P., which agreed to purchase Harmon in April at $120 per share, informed Harman that they believe that a material adverse change in Harmans business has occurred, that Harman has breached the merger agreement and that they are not obligated to complete the merger."
This news caused the Company's share price to fall from a closing price of $112.25 on September 20, 2007, to close at $85.00 on September 21, 2007, on unusually heavy volume.
Subsequently, on September 24, 2007, the Company announced that it would fail to meet its financial guidance for the quarter ended September 30, 2007, and needed to significantly reduce its estimates for the FY 2008. This news caused the Company's share price to fall to $80.31 on extremely high volume of over 14.5 million shares.
Investors who purchased Harmon between April 26, 2007 through September 9, 2007, may be affected.
Disclosure Problems at Micrus
The combination of misleading statements and the failure to disclose negative facts can be very troubling to investors. One recent example is Micrus Endovascular Corp. (Nasdaq MEND) and, not surprisingly, when the true facts came to light, disgruntled shareholders brought an action against the Company.
Specifically, on September 17, 2007, Micrus issued a press release announcing that it was revising its financial guidance and now expects fiscal 2008 revenues to be between $65 million and $75 million because of expected product approval delays in China as well as Japan and slower-than-anticipated sales in North America. In response to the announcement, the price of Micrus common stock dropped from $23.57 per share to $17.37 per share on extremely heavy trading volume.
Investors who purchased Micrus securities between February 12, 2007 through September 17, 2007, may be affected.
IPO Disclosure issues at Orbcomm
Investors in an IPO expect and are entitled to accurate disclosure. When such disclosure is inaccurate, there may be potential violations of the Federal Securities laws. It has been alleged that this is what happened at Orbcomm, Inc. (Nasdaq: ORBC) and a class action has been filed on behalf of purchasers of its IPO.
The complaint alleges that the Prospectus contained inaccurate statements of material fact because it failed to disclose that demand for the Company's products was weakening as certain end-users were delaying purchases and international sales were being negatively impacted by delays in modifying regional applications.
The true condition of the Company came to light August 14, 2007. On that date, ORBCOMM issued a press release announcing its financial results for the second quarter of 2007, the period ending June 30, 2007. In the press release and thereafter, the Company revealed that it was experiencing weakening demand for its products and services and was not adding subscribers at the rates it had anticipated. In response to this announcement, the price of ORBCOMM common stock declined from $11.18 per share to $7.86 per share on extremely heavy trading volume.
Investors who purchased Orbcomm common stock in or traceable to the Company's Initial Public Offering (IPO) on or about November 3, 2006 may be affected.
Other cases under investigation include LDK Solar Company (NYSE: LDK) and Care Investment Trust (NYSE: CRE).
If you are any affected investor in any of these companies, please contact us at info@securitiessleuth.com or 202 338 1756.
Likewise, if you happen to be aware of corporate restatements or other financial fraud -- especially if you're a victim -- you're encouraged to contribute to the Sleuth by giving your own tip-offs at http://securitiessleuth.typepad.com or by e-mailing info@securitiessleuth.com.
If you have a friend or colleague you think would benefit from The Sleuth, please pass along this issue and ask them to sign up at
http://www.cartville.com/app/join.asp?MerchantID=47994.
Warmest regards,
Mark McNair
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