Palm Beach, FL 11/23/11 (StreetBeat) -- Snack maker Diamond Foods' (Nasdaq: DMND) shares tumbled in premarket trading Wednesday after a media report that the death of a member of its audit committee was a suicide. Diamond Foods is in the midst of an internal accounting probe, but the company says the death is unrelated to the investigation.Still, shares fell $3.79, or 11 percent, to $31.18 on investor fears that the suicide might indicate accounting problems at the company.
Diamond Foods Inc. had said in a statement on its website Thursday that audit committee member Joseph Silveira died. On Tuesday, CNBC senior stocks commentator Herb Greenberg posted on Twitter that the death was a suicide, saying he got the information from the coroner's office in Modesto, Calif.
Greenberg also said on Tuesday that the company had told him Silveira recused himself from the accounting investigation because he was a walnut grower and thus had a conflict of interest.
A Diamond Foods representative did not immediately return a message to confirm whether the death was a suicide or if Silveira had recused himself. Calls made Wednesday to the coroner's office were not answered.
Jefferies analyst Thilo Wrede said it is important not to jump to conclusions about the death and said he does not necessarily think there is a link between the death and the accounting probe.
"The fact that the investigation still appears to be ongoing is another reason for us to lean to the view that Mr. Silveira's suicide was unrelated to the investigation," he wrote.
Diamond Foods' board is probing allegations of improper accounting for crop payments to walnut growers. It said earlier this month that its $1.5 billion acquisition of Pringles, first announced in April and set to more than triple the size of Diamond Foods, would be delayed due to the investigation.
Shares have dropped 47 percent in November on worries about the company's accouting and the delayed acquisition. They're down 34 percent in 2011.
Silveira was a long time member of Diamond's board as well as its predecessor company's board, according to filings with the Securities and Exchange Commission. He was president of Farmland Management Services Inc., an agricultural services company.
"Joe served Diamond shareholders as a director with dignity and dedication for many years. Any suggestion that his passing was somehow related to the accounting investigation by people seeking to profit by spreading such unfounded rumors is demeaning to his legacy," company spokesman John Christiansen said in an emailed statement Tuesday night.
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