Commodities & Metals

Agria, A Suit & A Dismal IPO (GRO)

Chinese-based agriculture solutions provider, Agria Corp. (NYSE: GRO) issued a statement this morning noting that the company will strongly defend itself against the class action suit filed against them for alleged violations of the S.E.C. Securities Act of 1933.

The complaint filed by the law firm of Schiffrin Barroway Topaz and Kessler alleges that the company did not disclose pertinent information during their IPO in November of 2007. Specifically, the suit alleges that company failed to disclose negotiations being conducted with the COO and other executives for compensation packages and this led to financial statements after the IPO that were not analogous to those filed in the prospectus.

As stated above, Agria plans to vigorously defend itself against any and all allegations of this nature. Whether or not the company violated rules is still an outstanding, but the dismal post-IPO is so bad you’d think the company has been sued every day of its operations.

Shares are down over 8% in early morning trading to $4.35. The 52-week range is $4.03 to $17.00. The company’s IPO share price was $16.50.  When you see performance like this, the initial assumption is that maybe the company should have never been public at all.  When you take into consideration that it has agriculture and China in it, then you really have to wonder why it has failed so horribly.

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Jon C. Ogg
April 14, 2008

Jon Ogg produces the Special Situation Investing Newsletter.  He can be reached at and he does not own securities in the companies he covers.