Diedrich’s Misfortune Continues

Diedrich Coffee Inc. stock continued its free fall Thursday, one day after the coffee shop operator said that its chief executive officer had resigned and that it expects to post a $1-million loss for the fiscal year ended Jan. 29.

The stock, which did not trade Wednesday, slumped about 30% Thursday in Nasdaq trading, plunging $1.75 per share to finish at a new yearly low of $4. Diedrich stock also tumbled $1.625 per share on Tuesday, and has lost nearly half of its value in recent days.

The company’s shares hit a yearly high of $12 shortly after the company’s initial public offering last September.

Diedrich’s stock stopped trading Wednesday because Tuesday’s tumble triggered an automatic review by the National Assn. of Securities Dealers, which oversees the Nasdaq market.

Diedrich’s chief operating officer, Kerry Coin, declined to discuss whether word of the loss had leaked out prematurely. NASD officials wouldn’t comment on whether they will investigate the stock’s drop.

“We don’t discuss specific cases, but in general terms, whenever there’s a price spike or unusual trading activity, it automatically triggers our stock watch system,” Nasdaq spokesman Reid Walker said. “We then look into the situation--but it’s important to add that that doesn’t necessarily mean an investigation is underway.”

Fast-growing Diedrich, which expanded to 46 locations from 12 in fiscal 1996, also told investors on Wednesday that it might close five poorly performing stores. And it said that Chief Executive Officer Steven A. Lupinacci, who joined the company in 1992, had resigned to pursue other interests.

The company maintains that it is still intends to expand outside of its core, Southern California market, and that it has arranged a $1-million line of credit.

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Market Tremor

The Bloomberg Orange County Index, a weighted index designed to measure performance of major Orange County stocks, fell 2.11 points Thursday. Hourly closing index levels, Eastern Standard Time:

9:30 opening: 147.30

10:30: 146.79

11:30: 146.89

12:30 p.m.: 146.55

1:30: 145.91

2:30: 145.49

3:30: 145.43

Close: 145.43

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Day’s Losers

Here are the 20 Orange County stocks with the largest percentage decrease in value:

1. Diedrich’s Coffee, Irvine, coffee retailer and restaurant chain: -30.5%

2. Imperial Credit mortgage holdings, Santa Ana Heights, real estate mortgage investments: -9.9%

3. Datum Inc., Anaheim, precision instruments: -9.9%

4. Ceradyne Inc., Costa Mesa, technical ceramic products: -8.1%

5. PairGain Technologies, Tustin, telecommunications: -7.2%

6. Research Engineers Inc., Yorba Linda, engineering software: -6.5%

7. Alliance Imaging, Orange, medical diagnostic imaging: -6.0%

8. Quiksilver Inc., Costa Mesa, casual clothing: -5.8%

9. QLogic Corp., Costa Mesa, electronic components: -5.7%

10. Imagyn Medical, Laguna Niguel, diagnostic medical devices: -5.5%

11. Premier Laser, Irvine, laser and fiber optic medical devices: -5.5%

12. Motorvac Technology, Santa Ana, fuel cleaning systems: -5.3%

13. Corvel Corp., Irvine, medical cost containment: -5.1%

14. Advance Logic Research, Irvine, computers: -5.0%

15. Quality Systems, Tustin, computer systems: -4.9%

16. Cocensys Inc., Irvine, neuro-pharmaceutical products: -4.3%

17. Pinnacle Micro, Irvine, optical storage systems: -4.2%

18. Gish Biomedical, Irvine, disposable medical products: -4.1%

19. Dense-Pac Microsystems, Garden Grove, computer memory devices: -3.9%

20. National Education Corp., Irvine, vocational training, publishing: -3.9%

Source: Bloomberg News

Researched by JANICE L. JONES / Los Angeles Times