Arthrocare Device Use Draws More Scrutiny
News of the restatement sent the stock reeling; shares were recently up 3.6% to $27.35.
By then, SIG Susquehanna analyst David Turkaly had already downgraded Arthrocare twice and adopted a negative view of the company's stock even though his firm still owned the shares. Turkaly, for one, has worried about DiscoCare from the start.
"As questions arose regarding the acquisition, management responded to investor concerns by stating that there was nothing unusual going on within the DiscoCare unit, and these were traditional business practices that were very common in the industry," Turkaly wrote last month, following news of the planned restatement. But "if DiscoCare's business practices were in fact very common in the industry, we are left to wonder: Why was the accounting of this relationship and subsequent transaction so difficult to get right?
"Here we are yet again, with more controversy surrounding the now-infamous DiscoCare."
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