American Apparel Inc Founder Pushed Out, Stock Price Jumps

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American Apparel Inc Founder Pushed Out, Stock Price Jumps
American Apparel

The American Apparel Inc (NYSEMKT:APP) board of directors announced that its founder, president and CEO Dov Charney, has been fired for cause following an investigation into alleged misconduct. Charney has faced sexual harassment and other accusations for years, and investors responded to his firing by rallying to the stock, up 4.69% to $0.67 this morning.

Even though the board said that the decision had nothing to do with operations, American Apparel has been struggling for the last year, falling from over $2 per share to less than $0.50 as losses increased from $37.4 million in 2012 to $106.3 million in 2013, report Shan Li and Andrea Chang for The Los Angeles Times. While the board’s decision may have been restricted to the misconduct investigation, the market’s response is more likely a sign that investors want someone else to take a shot.

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