Samsonite has some new baggage
Luggage manufacturer Samsonite lost its CEO Ramesh Tainwala on Friday. The announcement came after short-seller Blue Orca Capital accused him of false educational background claims on his resume.
Moreover, Tainwala claimed that he had a doctorate in business administration on his resume, which Blue Orca Capital challenged. Tainwala joked with the press, stating that his friends called him a “doctor” even though he wasn’t – but according to him, he never claimed he had a doctorate degree. However, his “Dr. Tainwala” title was clearly published in SEC filings, company materials, and Bloomberg’s website.
The short-seller also accused Samsonite of shady accounting measures, including the inflation of their profit margins. After they posted this report on their website, Samsonite’s (SMSEY) shares plummeted 21% in two days.
However, investors are looking past Tainwala’s wrongdoings and getting excited about CFO Kyle Gendreau’s new leadership. Shares were back up 10% last Friday, and Morningstar Financial valuates their stock at 35% higher than its current price.
Samsonite is the world’s largest luggage manufacturer, so it is likely that they will bounce back from this fluke. Gendreau has been with the company since 2009, so he knows all the ins and outs of the firm and the industry.
Look out for Samsonite’s shares; although their value may have taken a hit recently, the company is likely to rebound under new leadership and a more trustworthy system.
Featured image via Wikipedia
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