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Back on September 20 I questioned whether management at Abbott Laboratories had the skills to execute a growth through acquisitions strategy. At the time the company was–and it still is–involved in a dispute with Allere (ALR) over whether that company had disclosed all relevant information before the two companies inked a $2.5 billion buyout. Since then the Department of Justice has launched an investigation into Allere’s sales practices.

That kind of mis-step in an acquisition opens floodgates for short-sellers looking for other management errors. Indeed at the time of my post that had already happened with a short-selling attack on Abbott’s proposed deal to buy medical device maker St. Jude Medical (STJ). The charge by shorts was that hackers could launch an attack on St. Jude’s devices that would drain their batteries. On examination of how such a hacking would need to be conducted that seemed unlikely. But still, I felt the damage was done and I sold the stock out of my Jubak’s Picks portfolio on September 21 at $41.92.

Well, yesterday came news from the U.S. Food & Drug Administration that said that even if hacking isn’t a credible worry, St. Jude’s devices did have a battery problem. The company warned that a battery malfunction leading to rapid power draining could cause hundreds of its implanted heart defibrillators to stop working abruptly, and that the U.S. Food & Drug Administration had reported the death of two patients when their St. Jude defibrillators lost battery power. The company also noted that the problem is rare. Almost 350,000 St. Jude defibrillators are  implanted globally. Only 841 have been returned to the company for analysis due to complaints of battery depletion.

Shares of Abbott Labs fell on the news and shares closed at $40.98 today.

The sell on September 20 did not get accurately posted to the Jubak Picks portfolio page at $41.92 on September 21. I’m repeating that sell now and I certainly regret that posting problem. The gain on this position was 92.33% as of the close on October 12 from the original buy on September 24, 2010.