Under Armour, Inc. (UA) NYSE – founder Kevin Plank and other executives of the company have been names in a federal probe regarding its accounting practices. Furthermore, investigations allege management may have provided misleading business information to the investing public. The stock is down today in early trading.
Wells Notices were sent to Chief Financial Officer David Bergman informing them that the U.S. Securities and Exchange Commission is likely to “allege certain violations of the federal securities laws.”
IBD reports” Under Armour stock has an abysmal IBD Composite Rating of 4. This puts it in the bottom 4% of stocks tracked by IBD. Both earnings and stock market performance are weak.” Source:IBD
14 analysts at Tip Ranks rate the stock a hold- “Based on 14 analysts offering 12-month price targets for Under Armour in the last 3 months. The average price target is $9.00 with a high forecast of $15.00 and a low forecast of $4.00. The average price target represents a -8.91% decrease from the last price of $9.88.”Source: Tip Ranks
“A Wells notice is a letter that the U.S. Securities and Exchange Commission (SEC) sends to people or firms when it is planning to bring an enforcement action against them. It is issued at the conclusion of an SEC Investigation notifying the people or firm in question that the SEC has concluded that they should be charged with violation of the securities laws. The notice indicates that the SEC staff has determined it may bring a civil action against a person or firm, and provides the person or firm with the opportunity to provide information as to why the enforcement action should not be brought. The person or firm is generally given 30 days to file this response in the form of a legal brief considering legal and factual arguments as to why no charges should be brought against them. Although investigation is conducted on a confidential basis, this notice, as well as its response, is public information that can be used in later public hearings among other things.
Regulators are not legally required to provide a notice; however, it is the practice of the SEC and the Financial Industry Regulatory Authority (FINRA) to provide such notice. In addition, 80% of people who were sent a Wells Notice from 2011-2013 ended up facing charges for allegedly violating securities law.” Source: Wikipedia
Mr. Plank became Under Armour’s Executive Chairman and Brand Chief in January 2020, following his role as Founder, Chief Executive Officer and Chairman of the Board of Directors from 1996 to 2019, and President from 1996 to July 2008 and August 2010 to July 2017. Founded in 1996 out of frustration that cotton T-shirts were unable to keep him dry and comfortable while playing football at the University of Maryland, Mr. Plank designed and created a new apparel innovation that efficiently wicked sweat to optimize athletic performance. Nearly a quarter of a century later and Under Armour has grown into one of the world’s leading developer, marketer, and distributor of branded performance apparel, footwear, and accessories. Mr. Plank also serves on the Board of Directors of the National Football Foundation and College Hall of Fame, Inc., and is a member of the Board of Trustees of the University of Maryland College Park Foundation. Source:Under Armour
Photo Credit Wikipedia
