Perrigo Co. announced yesterday that it would need to restate historical financial statements without providing much detail. This left investors worried during yesterday's session and overnight.
The need for this action is that the company recently sold royalty-bearing assets for cash, causing auditors to demand a retrospective reclassification of the adder on its balance sheet.
Investors cheered on the issue's clarity and the fact that it will not cause material changes to the company's historical financial results. Equally important, the company announced its intent to use the proceeds of the sale to pay down debt putting its credit rating on more stable footing.