Celadon Group lost more than half its value on May 2nd after an accounting firm withdrew several years of audit reports and the company announced that its previous financial reports may not be accurate.
The mega carrier, with approximately 3,000 tractors and 8,700 trailers, has been under fire for several months, after a report claimed of multiple accounting errors in the company’s financial statement.
The news of independent auditors withdrawing years of financial reports strengthened the accounting claims and caused the stock to plunge as much as 67% on Tuesday.
Prior to Tuesday’s massive plunge, Celadon was already facing significant pressure on their stock price. The stock was down 44% so far in 2017 and even sparked a class action lawsuit.
The case, Chavez v. Celadon Group, Inc. focuses on whether Celadon and its executives violated federal laws by making false and/or misleading statements.
In addition, Celadon announced on May 1 that President and COO Eric Meek will resign and leave the company.
Some industry analysts have speculated that Celadon’s financial woes, and plunge in value, make it a prime candidate for acquisition by a larger player in the trucking industry.