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What: Shares of Diamond Foods (NASDAQ:DMND) were looking tastier today, gaining as much as 13% after the BlackRock investing group disclosed a stake in the snack maker.
So what: According to an SEC document filed on Friday, BlackRock, the investment giant with over $3 trillion in assets under management, purchased a 7.85% stake in Diamond Foods, the maker of Kettle chips and Emerald nuts, among other food products. Diamond's stock has had a tumultuous past couple of years, dropping more than 80% amid an accounting scandal that led to the ouster of its CEO and CFO and the restatement of financial results, which erased $56 million in profits.
Now what: BlackRock's investment is a major vote of confidence in Diamond's ability to turn things around. New CEO Brian Driscoll brings experience from running Hostess Brands, and has promised to cut costs and invest in the company's brands. Despite its inability to acquire Pringles from Procter & Gamble, Diamond still has a strong brand portfolio and should be able to return to profitability now that the accounting shenanigans are behind it. I expect the stock to move higher eventually as the company recovers.
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