After a 50-percent plunge related to allegations of discrepancies in LDK's silicon inventory, the stock (NYSE: LDK) turned upward Tuesday when the company upped its revenue guidance for the third quarter (see LDK Says Inventory Discrepancy Allegations Have 'No Merit', New Details Surface as LDK's Stock Continues to Plunge, LDK Steps Up 3Q Guidance).
In recent trading, shares rose 3.5 percent to $46.38 per share.
The increase comes in spite of class-action lawsuits that three legal firms said they started on behalf of shareholders this week.
On Wednesday, Federman & Sherwood said it filed a class-action lawsuit in New York's Southern District alleging LDK issued "a series of false and material misrepresentations to the market, which had the effect of artificially inflating the market price of the company's publicly traded securities."
Schatz Nobel Izard said Wednesday it filed one in California's Northern District alleging flawed internal controls resulting in inventories that were "materially overstated," and Coughlin Stoia Geller Rudman & Robbins also said it filed a similar complaint in California's Northern District Tuesday night.
But none of the legal firms has yet found a lead plaintiff, according to the statements.
Responding to the news about LDK's raised revenue guidance, shareholder Jason Bui called it "a bittersweet victory" and said it's the first step of many to "restore the company's pre-bad-news luster."
"LDK has still not delivered the official independent inventory report, and I know that all investors, and potential investors, are waiting for this," said Bui, who added he bought LDK during its initial public offering and has held onto his shares so far. "Management's word can only go so far, especially when there are allegations of management fraud."
While Bui previously said he believes that LDK's management is on the level, he added that the response so far is "too little, too late" for investors who bought LDK shares near their peak value.
"Many feel that LDK's move to up revenue guidance is only a short-term Band-Aid," he said. "If nothing is said this week, then the stock will continue to suffer. … I will be very weary of investing in other Chinese companies in the near future because I feel that there is a group of people that do not wish these Chinese companies to succeed."
In the meantime, LDK competitor ReneSola (LSE: SOLA) was quick to paint LDK's situation as unique.
"It is definitely a strong wake-up call to urge the companies to review and tighten up their [respective] accounting systems," said Charles Bai, chief financial officer at ReneSola, on Tuesday. "I don't think every solar company using scrap materials as feedstock shares the same problem."
Bai said ReneSola takes a conservative approach in accounting for its scrap silicon, valuing it at its market price.