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News on Friday from Reddy Ice (FRZ) that federal officials executed a search warrant at its Dallas offices caused its shares to melt nearly 30%.

What’s behind the raid? No idea, but Reddy graced this blog last April. Here’s what I wrote at the time after going head-to-head with Eric Bolling, then of CNBC and now of Fox Business:

Even after I called for an official challenge of host Dylan Ratigan’s victory award to Eric Bolling in tonight’s “Street Fight” segment of CNBC’s Fast Money, my buyer beware on Reddy Ice was ignored.

But I'’m not done (one of the benefits of controlling this blog!): You may want to go back and search through the SEC archives for the prior incarnation of this company, when it was called, Packaged Ice. You’ll note a melting of the shares in the faces of miserable financial performance before going into the arms of a private equity shop only to be put back to the public in 2005.

Bolling kept saying Reddy has no competition, yet even the company acknowledges in its current SEC filings that it has plenty of competition in a very fragmented industry.

Furthermore, revenue grew only 8% last year, and part of that was the result of the company’s growth-by-acquisition strategy. (In other words, it'’s somewhat of a rollup.)

The company lures investors with a 5% dividend, but that dividend is subject to strict debt covenants at a company that is highly leveraged.

It'’s also engaged in a highly seasonal business (two-thirds of sales are in the second and third quarters) and is a big user of fuel to make and freeze the ice as well as deliver it. (Which means its financial performance is dependent on oil.)

Oh, and then there’'s the weather.

And it'’s a thin stock. The thinness can make it quickly rise to artificial heights; it can also, of course, cause it to fall just as quickly.

Based on Friday's plunge, that may go down as the understatement of the year. Stay tuned.

Source: Reddy Ice Shares Melt Following Fed Office Raid