Maybe the House of Chrome is tarnishing??
A Harley-Davidson Inc. shareholder has sued the motorcycle company, alleging that it used false and misleading accounting measures to conceal weakened sales, which later led to a collapse in the stock price.
In the lawsuit filed Wednesday in U.S. District Court in Milwaukee, Raymond Kadagian alleges that Harley shipped more motorcycles to dealers than they could sell, a practice called "channel stuffing."
The essence of the claim is that Harley inflated its sales prospects and failed to disclose the company's true financial condition, said David Scott, a Connecticut attorney representing Kadagian, who lives in Las Vegas.
Kadagian is a "small" Harley shareholder, Scott said. He is seeking class-action status on behalf of himself and others who bought Harley shares between Jan. 21, 2004, and April 14, 2005.
In mid-April, Harley shares fell 22% in only three days after the company announced it was lowering its 2005 earnings forecast, was temporarily cutting production by 3%, and might not achieve a goal of producing 400,000 motorcycles in 2007. The day of the announcement, April 13, the company's shares posted their biggest drop in 14 years, knocking almost $3 billion from their stock market value.
On Thursday, when most stocks were slightly up, Harley shares closed up 38 cents at $49.56.