Garda Victim Of Hedge Funds, says source

Date: Friday, November 16, 2007
Author: Sean Silcoff, National Post

Garda World Security Corp. yesterday sought to quell market concerns as its stock continued a one-month slide. But while the Montreal-based security services firm said "there is no particular information to disclose" that may explain the stock's 26% drop in the past month -- including a 4.8% tumble yesterday -- one investment professional who watches the stock said Garda has become the target of a smear campaign by hedge funds. The source, who asked not to be named, said three rumours, which all appear to be unfounded, are floating around the Street: that Garda is set to lose a key contract with a financial institution; that one of its airport security contracts will be hurt by a strike; and that chief executive Stephane Cretier is ill. "Hedge funds are manufacturing all kinds of information and having a field day with the stock," the source said. But one arbitrageur who asked not to be identified said yesterday's slide seemed to be the result of "one or two" long-term holders trying to get out of the thinly traded stock.