SEC is Investigating Hain Celestial-Could Hain Celestial be the Next HealthSouth?

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Hain Celestial drops a bomb while Wall St. players are away.

The company says it cannot provide financials at this time.

Hain Celestial is facing breaking financial covenants with lenders if it does not have complete audited financials completed and delivered to the lending administrator February 24, 2017.

But that is not all there is to this story.  Hain Celestial disclosed being investigated by the SEC.  Whoops.

But, but, but the bulls say the company came out and said the board completed their audit and was pleased to move forward.  Does pleased mean “Oh shit this happened on our watch” and “move forward” mean find me a plane ticket to Aruba?

Seriously, how long do you think they have held this nugget of information?  They have issued press releases about every 2 weeks on random thing but couldn’t let this one out until late Friday evening?  Chocolate yogurt is a big deal, don’t get me wrong.  But something tells me the bulls in Hain Celestial would rather this bomb had dropped back in August.  Saving us all the ranting about who was buying the company out at a huge premium.  Dreamers then, class action lawsuit participants now.

Anyone who has been around an earnings delay knows to not drink the gluten-free Kool-Aid, with natural buyout flavored sweetener.  Drinking that stuff is great for weight loss (and bank account loss).

 

As written before the bad news never comes out all at once (see original article here).  In a few days, if not already the company will have breached the financial covenants with lenders.  Not a good thing.  That’s when a company goes from bad to toxic.  Remember HealthSouth shares dropping below .15 cents?  The quarterly numbers became harder and harder to meet.  Quarter after quarter it was building pressure until it finally exploded.  They just couldn’t keep the jig up.  Richard Scrushy went to prison for doing the same thing many have done and are doing today.  Is Hain doing the same?  If they are we will see them on the pink sheets.

See why on Monday(2-6-17) we bought the Feb 17 $34 &  Feb 17 $33 puts.

 

More to come