Sonova Holdings AG (SONVF.PK) is a Swiss-based company, which builds hearing aids and other hearing healthcare solutions. The company has manufacturing base in Switzerland, Vietnam & China. The company took a big hit in March 2011 as its share price fell off a cliff.
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With prices trading at CHF115 ($125.6913) on March 15, 2011, the company announced its sales and earnings outlook for 2010/11. Despite a sales increase, the company announced that the launch of its new Phonak hearing range had been delayed in the US due to an unclear regulatory situation. They were also affected by a recall of their Advanced Bionics, which is estimated at costing them CHF 65 million ($71 million). The next day the price had dropped to CHF 89.15 ($97.4381), a decrease of 25%.
Unfortunately due to the reporting practices of Swiss companies, we cannot verify who carried out a transaction, but it certainly saw one member of the exec team get burned. They bought close to 50,000 shares at CHF122 ($133) three days prior to the announcement. However, they were in the minority, as in the fortnight before the announcement, a total of €11.09 million was sold by directors. This was made of many selling shares straight after exercising options, but also included 5 straight sells.
One trade that did come to light was that of Chairman Andy Rihs, who sold €28.9 million on March 8, 2011. But with accusations of insider trading, the director was forced to overturn the trade and also demote himself. Despite all concerned denying the allegations, Chief Executive Valentin Chapero and Chief Financial Officer Oliver Walker resigned from the company.
Despite the controversy, the directors have not been put off trading, and in the following three months have been back in the market buying at between $85 - $97) per share.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
