I’ve come around to believing this halt is a company tactic.
I think it is just too great an unlikely coincidence that Deloitte’s would find problems with the audit at such a late stage or be in conflict with management about it.
I’ve also changed my mind about a potential stake/buy out offer, as this is also too great a coincidence to have happened at this particular time.
On the balance of probabilities I think a halt at this late stage is indeed a tactic to hit the shorts.
Whilst management may or may not see this as something personal against shorts, they do have a self interest and responsibility to defend the company and it’s stock against what have been wholely unreasonable attacks.
The halt has come at a time when the DTT audit if not finished, will be largely known.
Then there is Starr.
I think Hank Greenberg and his staff have as much savvy in the US capital markets as anyone.
Greenberg has a long history in China with much respect garnered.
In addition he has his rep on the CCME board.
Because of this and also because of the Starr large stake in the company, Starr will have management’s ear and with a now quite long working relationship - CCME specifically having stated they wanted Starr’s expertise via the original offering – I believe management would follow Starr advice first.
If I was Starr I’d be angry about my investment being dicked around like it has. But Starr have the expertise and clout to strike back and have their investment more fairly valued.
I believe the halt is on Starr advice.
If this is the case, I believe they have manufactured whatever sufficient tenuous reason to justify a ‘material news’ halt approval.
I think there will indeed be a slew of good news accompanying the 10K release.
This was always going to be the best time to defend the stock, as the 10K is the binary clincher.
If the 10K is clean, as I believe it will be, shorts are trapped, the stock will gap up.
Longs know this and there will be intense buying pressure from momentum longs competing with the shorts need to cover.
Basically they won’t be able to cover fast enough to get out without ever increasing losses.
Judging by the latest slew of hit pieces the shorts had planned to get out lower by intensifying the FUD around the 10K release. Judging by the fear on this board today,that tactic would have been successful but has been stymied by the halt.
They will attack the credibility of Deloitte’s and the audit – need a forensic audit etc. etc. - after the 10K is out.
There doesn't seem to be much middle ground here.
Either the Company is an incredibly cunning fraud, or at least managed to fool DTT on last year’s 10K with a certain indefinable level of deception that was not detected by the No1 auditor in the world OR they are what DDT has found them to be in 2009 and likely 2010, since DDT are still on board a few days before 10K release.
We will hear nothing from the company until the 10K is released on time or earlier than 16th – it won’t be late this time - and followed up by a number of positive PR’s.
If the shorts are seen to have got this one so badly wrong, that in itself will give the company added credibility on top of the clean 10K itself.
In addition longs will now gain from the much greater visibility the company has garnered from this whole saga.
The outcome here will be big news and the stock seen on a scale possibly similar to the profile it might have had on a big institution initiating coverage.
Ironically, we’ll have the shorts to thank for that.
