- The U.S. Securities and Exchange Commission has opened a formal investigation into Hain Celestial Group Inc.’s accounting practices, according to the Wall 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.
In late August, the Hain Celestial Group struggled with a series of accounting irregularities that led to a delisting 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 and spiked more than 13% in a single day.
The company continued to rebound. In November, it launched an incubator called Cultivate Ventures. Last month, the company extended its reach in India with 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 company ripe 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 Celestial all the more desirable as a takeover target.