What happened

Shares of CareDx (CDNA -0.28%), a diagnostics company that monitors transplant recipients, are sliding after the company presented earnings results for the third quarter of 2021 after the market closed on Thursday. 

The pressure on CareDx stock today isn't due to something the company presented. A disclosure buried in its quarterly filing with regulators is the reason the stock is down by 26.9% as of 11:30 a.m. on Friday.

So what 

The United States Department of Justice (DOJ) recently sent CareDx a civil investigatory demand (CID) requesting documents in connection with a False Claims Act investigation. The DOJ is investigating business practices related to the company's kidney testing and phlebotomy services.

Investor looking deeply concerned about stocks.

Image source: Getty Images.

CareDx also received a subpoena from the Securities and Exchange Commission (SEC). The SEC is conducting its own investigation about matters included in the CID from the DOJ. The SEC is also looking into CareDx's accounting and public-reporting practices.

Now what

It's too early to know how much trouble CareDx is in. During the earnings call yesterday afternoon, management never mentioned the investigations.

The company's third-quarter results, as reported, were highly positive. On a GAAP basis, the company narrowed its loss to $4 million in the third quarter. Adjusted earnings before, interest, taxes, depreciation, and amortization (EBITDA) came in at $4.7 million.

Total revenue soared 42% year over year to $75.6 million. The company even raised its outlook for total revenue this year from a range between $280 million and $290 million to somewhere between $290 million and $293 million.