The downgrade of China Agritech (Nasdaq:CAGC) by Chardan Capital punished the Chinese fertilizer company more than a downgrade normally would, mostly based on analysts' concerns over the past and present auditing of the company.
Consequently, China Agritech closed at $13.29, plummeting $2.59, or 16.3 percent.
In a note to clients, analyst Tim Tiberio said, "In light of increased scrutiny over the relationships between Chinese companies and their auditors, we believe China Agritech's auditor history could place the shares under pressure going forward."
Not long after the downgrade the company came out with a statement it still expects to meet its 2010 guidance, which did nothing to forestall the damage from the auditor issue.
Agritech was downgraded from "Neutral" to "Sell."
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