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6:17 PM · 22 January 2024

Archer Daniels Midland under pressure amid ongoing investigation 💡

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Shares of Archer Daniels Midland (ADM.US) are experiencing significant declines, exceeding 20%. The company is currently the biggest loser in the S&P 500 index. The sharp drops followed reports of poor accounting practices within the company. Additionally, ADM announced the administrative leave of Chief Financial Officer Vikram Luthar and postponed the publication of its annual and quarterly reports. The investigation focuses on "intersegment transactions" in ADM's nutrition division, which produces food ingredients for humans and animals. The company is collaborating with an external legal advisor and audit committee to clarify the matter. This situation raises concerns about the potential impact on ADM's future operations and reputation, especially considering the company's history, which includes a price-fixing scandal from the 1990s. The investigation was initiated in response to a document request from the SEC.

The company has revised its full-year earnings forecast for 2023 to $6.90 per share, down from $7. Furthermore, Archer Daniels has withdrawn forecasts for its Nutrition unit. This move is a response to the ongoing investigation.

Shares of Archer Daniels Midland are trading at their lowest levels since January 2021. Source: xStation

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