Shares of Compass Diversified Holdings fell over 60% in intraday trading on May 8, 2025, following the company's disclosure that its 2024 financial statements should no longer be relied upon due to irregularities at its subsidiary, Lugano Holding, Inc. Compass launched an internal investigation into Lugano's financial reporting practices and identified "irregularities in sales, cost of sales, inventory, and accounts receivable," as well as "unrecorded financing arrangements." The company has announced a delay in filing its Q1 2025 Form 10-Q following the disclosure, and Lugano's founder and CEO has resigned without compensation.
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