Today’s Research Reports on Stocks to Watch: Papa John’s International and Farmland Partners
An alleged racial slur during a conference call between former Papa John’s CEO John Schnatter and a media agency is what sent shares of the company down on Wednesday. Shares closed down nearly 5%. Farmland Partners saw its own shares plummet after an article alleged that the company had failed to meet its responsibilities of fair and full disclosure and intentionally misled investors with its financial reporting. The company has denied the allegations.
RDI Initiates Coverage on:
Papa John’s International, Inc.
Farmland Partners Inc.
Papa John’s International, Inc. shares closed down 4.84% on about 3.2 million shares traded on Wednesday. The pizza giant fell to a new low of $47.80 during intra-day trading after Wall Street learned that the company’s chairman John Schnatter had used a racial slur as well as graphic descriptions of violence against minorities in a conference call back in May. Schnatter had stepped down from his role as CEO of the company back in January. Forbes reported that media agency, Laundry Service, which is owned by sports agency owner Casey Wasserman, had told staff in a letter dated May 31st that it is ending work with an un-named client due to "the regrettable recent events that several employees of Laundry Service witnessed during interactions with a client’s executive." CEO of Papa John’s, Steve Ritchie, sent an internal memo to team members that was obtained by Bloomberg News. It read, "You may have read the media reports today tied to our company culture. We want to make it clear to all of you that racism has no place at Papa John’. The past six months we’ve had to take a hard look in the mirror and acknowledge that we’ve lost a bit of focus on the core values that this brand was built on and that delivered success for so many years. We’ve got to own up and take the hit for our missteps and refocus on the constant pursuit of better that is the DNA of our brand."
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Farmland Partners Inc. closed down almost 40% in yesterday’s trading session and hit a new low of $5.15. Trading volume was explosive at a little over 7 million shares compared to an average of about 218,000 shares. The stock tumbled after it was featured in an article published anonymously on an unregulated website by the holder of a short position in the stock. The person is alleging that the Farmland Partners had failed to meet its responsibilities of fair and full disclosure and intentionally misled investors with its financial reporting. The company responded to the article and said the allegations are false. The internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate, plans to have a more detailed response in the next coming days.
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Our Actionable Research on Papa John’s International, Inc. (NASDAQ: PZZA) and Farmland Partners Inc. (NYSE: FPI) can be downloaded free of charge at Research Driven Investing.
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