Dive Brief:
- The U.S. Securities and Exchange Commission has opened a formal investigation into Hain Celestial Group Inc.’s accounting practices,according to theWall Street Journal.
- Shares of the natural-food supplier dropped as much as 15% once news spread about the SEC inquiry.
- Hain has delayed the release of its fourth quarter and fiscal 2016 financial results due to an internal review of its accounting.
Dive Insight:
In late August, the Hain Celestial Group struggled with a series ofaccounting irregularitiesthat led to adelisting notice from the Nasdaq Stock Market. This also caused the delay of its Q4 and year-end fiscal numbers, though the company claims there has been no evidence of "intentional wrongdoing."
After the accounting errors were resolved in November, Hain Celestial's stock did an about-face andspiked more than 13%在一个单一的一天。
The company continued to rebound. In November, itlaunched an incubatorcalled Cultivate Ventures. Last month, the companyextended its reach in Indiawith a strategic joint venture with Future Consumer Limited (FCL) and Hain Tilda India Private Limited.
Before these issues, Hain Celestial had been viewed as a companyripe for takeover— the natural products company had seen double-digit revenue growth for 20 consecutive quarters, and is a major supplier for Whole Foods Market Inc. In the last weeks, it's emerged as a potential acquisition target again. Some analysts have even proposed that a failure to rebound makes Hain Celestialall the more desirableas a takeover target.
