Attention day traders! The Slater & Gordon Limited (ASX: SGH) share price is roaring as much as 17% higher today.
Shares in the multinational law firm closed on Friday at just 23.5 cents but were trading at 27.5 cents by the early afternoon.
What happened?
The Slater & Gordon share price pop came despite there being no company specific news being released by the company. However, as can be seen in the chart above, the Slater & Gordon share price has been the focal point of much volatility in recent times. And for good reason.
Over the past 24 months, investors have grown concerned over Slater & Gordon's accounting practices and management. Moreover, the company has a truckload of debt.
On December 28th, as shareholders began to wonder if the company would be in breach of debt covenants in 2018, the company responded to media scrutiny by saying it is working proactively with its lenders to explore options for refinancing.
"The process has commenced well ahead of the May 2018 deadline, with the objective of achieving an appropriate and successful outcome for stakeholders and a smooth process leading to that outcome," the company said.
Foolish Takeaway
Slater & Gordon appears to have bitten off more than it can chew in the United Kingdom with its acquisition of Quindell Plc's Professional Services Division. Moreover, fundamental concerns over the viability of a publicly listed law firm could be coming home to roost.
Personally, despite once being a shareholder of Slater & Gordon, I think it is one best left for the day traders – not investors.
