But then, on November 4, 1999, Fruit revealed it had suffered an astonishing loss of $166.4 million in the 3rd Q 1999 on sales of just $548 million, a loss of $2.49 per share. This huge loss was not only due to Fruit's poor and out-of-control operations, but also a massive $60 million write-off of over-valued and non-existent inventory, a $20 million loss on cotton futures contracts and a $10 million charge for a loss on a supply contract from a previously sold facility. In December 1999, Fruit ran out of money and filed for bankruptcy. On March 17, 2000, Fruit announced its 4th Q and year end 1999 results, including a staggering loss of $398.5 million in the 4th Q 1999. Instead of achieving success with its operational reorganization, recovering from its production problems, achieving expense reductions and growing revenues, net income and EPS, as well as the strong cash flow as defendants had forecast for Fruit during most of the Class Period, Fruit, in fact, suffered declining revenues, huge losses and massive cash flow deficits because its MIS and inventory and production control systems were defective, its reorganization had failed and it could not overcome its production problems, leading to massively escalating expenses, all of which resulted in Fruit's bankruptcy. Fruit's stock became virtually worthless, inflicting millions of dollars of damage on class members.

http://biz.yahoo.com/bw/000330/ny_stull_s_1.html

-- - (x@xxx.com), April 21, 2000

Answers

Here's an example of PONZI several years ago. The stock was a high flyer and now it's just wallpaper.

-- I KNOW (i@know.now), April 21, 2000.

They must have been incredibly mismanaged. Given the number of Doomers shitting in their shorts during the last two quarters of 1999, I would have thought that the opportunities for an underwear maker to make a killing would have been limitless.

-- E.H. Porter (Just.Wondering@About.It), April 21, 2000.

I think it's pretty simple. Massive losses because people just don't wear underwear anymore. Inventory and production problems because they kept making underwear.

-- lola (whotfru@mindspring.com), April 21, 2000.

E.H. we just used alot of Clorox

-- You're (...@shit.head), April 21, 2000.