Reuters reports that shares of Diamond Foods, currently the target of a regulatory probe, rose as much as 14 percent, after CNBC reported rumors that high-profile investor David Einhorn may have invested in the company.
When contacted, Einhorn, who runs hedge fund Greenlight Capital Inc, declined to comment. Diamond Foods also declined to
"For people who are long (on) Diamond stock, it would be a good thing... If someone takes a large stake who is a well regarded investor, others tend to follow like lemmings," said an investor, who did not want to be identified.
The rumors come at a time when the U.S. Securities and Exchange Commission is probing the snack maker's accounting of payments to walnut growers.
Diamond's stock has lost more than half its value since it first announced an internal probe into the matter. It fell to its lowest level in two years after the SEC announced its probe earlier this month….
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http://www.reuters.com/article/2011/12/29/us-diamondfoods-idUSTRE7BS10Y20111229
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