Diamond Foods, Inc. (NASDAQ:DMND)

I'll play ball............

purely a bounce play

Spec bet on people's love of Pringles & nuts.

Stock is down 36% on accounting restatement and ousting CEO

Don't eat the cooking. 2 roaches found in the kitchen. Today, Diamond Foods just fired its CEO and CFO after the audit committee found its books have been cooked.

I don't think the pain is over here. This is a company that was obsessed with its image (they love to write emails to whine about their treatment in articles, for instance...) Why? Because they were running a roll-up game, buying "growth" with inflated stock. When your currency is public sentiment, you need to do things like whine about how articles portray your business.

Now it looks like we had outright fraud, with the CEO and CFO getting canned for moving costs around in what looks like an attempt to smooth the numbers. Pringles is a crummy asset anyway, but they won't even be able to pretend they'll be harvesting "synergies" by folding it in, since I would bet that P&G won't bless the buy, and probably won't even whizz on these dudes now that their hair is on fire.

What's a broken growth story worth? What's a broken growth story that may have been entirely predicated on fraud worth? Surprisingly, the answer may be "more than the current market price," but I am willing to bet that most investors won't see it that way for quite a while, and I expect this thing to continue to crater. And who knows, there may be other disgusting bugs further in the woodwork, unless you believe that those are the only 2 cockroaches in the restaurant.

this is a risky call. They just said they would restate because of fauty acounting prices, they were al ready not doing so hot, however a 40% drop might just be over done.

they are still profetable, I suspect. They are still selling nuts.

Then again, if they have problems with recording 40M dollars, the problems might get biggger before they get smaller.

fraud will be backed out and the real numbers at the present valuation are probably a good value.

pick up on this drubbing ... speculate on a recovery.

cooking the books

Too good to fail

poor accounting

Excellent opportunity to make some real money......will see 60+

keep eating nuts !

This is purely speculative, but within a 5 year window, this company will be back to the levels seen 3 or 4 months ago. Might be too soon, and if you're going to buy in real life, I'd be very careful or use very little money. There's no reason they can't bounce back. I definitely don't see it going sub 10's, and I do see a major upside once the deal with Pringles goes through, regardless of the debt that will be required to purchase it.

Looking at the balance sheet, income statement and cash flows the company is not in trouble. Even IF they had to cut Net Income for YE 7/31/11 in half it would still be as much as Net Income for 2009 and 2010. With all the turmoil it is not an $80 stock but I can see $10/share upside in it.

A staggering 75% of Diamond's float was sold short as of mod-November, but share prices have fallen another 15% since then. It's reasonable to expect that a few short-sellers are taking profits here, boosting the analyst effect a bit further. An accounting scandal involving payments to walnut growers has brought on a flurry of shareholder lawsuits, internal audits, and other investigations, slicing share prices in half since late October. Those shorts are bound to cover their bets at some point. If you think the worst is over, this could be a terrific buy-in point.

Sell off is overdone, their fundamental business still has tailwinds, have you seen nut prices lately?

fraud