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This is odd:
http://www.lvwcpa.com/liggett-vogt-and-webb-receives-clean-inspection-report-by-pcaob/
So the auditor, in their news section at the end of 2016, reported that they received a clean inspection. Great right?
Read closer:
Their previous auditor HJ also failed inspection.
https://pcaobus.org//Inspections/Reports/Documents/2014_HJ_Associates_LLC.pdf
The chance a firm fails an inspection is around 15%.
Citation: https://pcaobus.org/inspections/documents/12102012_release_2012_06.pdf
The chance of two firms in a row failing inspection is 2.25%.
Is there anybody who is closely related to the HJ firm who could offer some insight?
SUNW auditor failed inspection by PCAOB
See here:
https://pcaobus.org/Inspections/Reports/Documents/104-2016-071-Liggett-Webb.pdf
"Audited" 10-K coming out soon.
Here are some gems:
Company missed guidance so badly it shocked me how badly the missed it. Seems like CEO credibility is finally being questioned by almost everybody.
There was also a suspicious sell off two weeks or so before the prelim results came out, will be interested to see if there are any hints as to what caused it when we get the 10-K.
Stock now lowest price since they bought SunWorks.
Something must be done about these Russian hackers attacking the stock before it's too late.
Exclusive footage of Russian hackers moving to US to cause havoc with solar stocks:
The company had a huge backlog going into last year, almost $50M. That backlog included more residential, which is higher margin. So I don't think the backlog means much since the company has proven to be quite capable of falling flat on their face even with a healthy backlog.
Anybody else find it funny that they made JUST enough profit to pay out all the executive bonuses (which were more than the profit required to reach them), and then proceeded to go back to losing money again right away?
Sounds like Nelson might have spent too much time in the kitchen cooking the books.
Remember it's not paranoia if they really are out to get you! (your money anyways)
You obviously were just looking at revenue and not expenses.
Expenses have actually grown quite a bit in the second half of the year compared to 2015.
See... growth!
The guidance was made originally in November, and then Nelson himself repeated it in December at an investor conference.
The only caveat was that there was a tiny disclaimer on the slide (but not mentioned by Nelson) that they were reiterating guidance from November not issuing new guidance. However it is my contention that if you reiterate old guidance, you are endorsing the general quality of that guidance. If you know that guidance to be bad then you should ideally provide updated guidance, or at the very least say nothing. Nelson choose to promise to investors that they were still on track to meet that guidance.
Nelson reiterated that in December.
Proof:
They did not have to include that slide in the presentation, and Nelson did not have to explicitly state they would do between $95-$100M, but he did. They referenced the Nov call numbers, and by repeating Nelson told investors they were reliable. He proceeded to say that is what they were going to do. After all, the slogan of the company is "Doing What We Say We Will Do". A vaguely worded disclaimer in 8pt font that basically says "This speaker might be lying to you" doesn't absolve one in this situation.
Let's say I wrote an article that was 100% BS, and included a tiny disclaimer at the bottom that said "Watch out, this might be 100% BS" and then people lost money because of the article. I doubt many people would be saying "Oh he did nothing wrong, he might have said stuff he knew was not true, but he put a tiny disclaimer that said he might be lying".
He has now missed guidance, epicly, twice in a row. He got himself downgraded by @#$%ing Chardan of all people, a total pump shop that raises capital for all kinds of questionable companies. I guess there is only so much they can take.
As a reminder here is audio of Nelson himself speaking in December:
Great question.
If anybody wants to do this themselves / check my work I am using this template: http://investexcel.net/altman-z-score/
Here is what I got for Q3:
Using what we know from Q4 and the rest gets this, though it will vary slightly once the 10-K comes out:
Q4 stays about the same as Q3 because operating income, while still negative, was less negative. But deterioration in assets still occurs.
And if we assume that Q1 is just like Q4 (the company already implied it would be weak), which is what I did when I made my "on the path to bankruptcy" statement, we get something similar to this:
Basically it was bad shape as of Q3, but still above average for companies that end up going bankrupt. But if it does not change course then that Z score rapidly deteriorates.
One could also question the $10M of goodwill on their books and whether or not that will be written down.
It's been working well so far!
First of all, I was responding to the hypothetical situation Carl put forward in which the company intended to lose money for whatever reason. It would be lying to guide for profits when you intended to lose money.
As far as guidance, Nelson stated very clearly in December that guidance was supposed to be $95-$100M.
I will let Nelson speak for himself and you can decide what he meant, keeping in mind this was only a couple of weeks before the end of the year:
Nelson guided for profitability for the year, so if it was part of a long term plan to lose money this year, then he lied.
They certainly are on the path to bankruptcy.
In order for them to avoid bankruptcy they will have to do much better than they have been. Continuing to perform as they have been will lead to bankruptcy. They lost $2.9M last quarter, and more than that for the year. We already know Q1 will be bad.
How on earth they lost so much money in Q4 is a mystery.
If their gross margin was about the same in Q4 as Q3 - COGS should have been around $13.32M - this puts SG&A around $8.1M - when they did about the same revenue last year SG&A was only $4.7M.
This is not sustainable and if Q1 is similar to Q4, significant damage will have been done to their working capital, which will severely limit their ability to work through their backlog. An inability to work through their backlog combined with what appears to be a higher and steady SG&A expense means they will either have to downsize big time to cut costs, raise capital most likely via dilution near multi-year lows, or go bankrupt. This reminds me quite a bit closely to RGSE which also had a huge backlog... right before the stock got destroyed.
The financial strength of this company is highly overrated by the few people who remain bullish in this stock. The market as a whole is rapidly catching up to the truth though.
This isn't to say they will go bankrupt for sure, only that they will need to change course quickly to advert it, I personally do not see it likely that will happen.
Wasn't too long ago the SUNW bull case was comparing the Sungevity model to Sunworks, favorably. Will be interested to see how this new information will be integrated with that.
Shows that the execs there were probably more desperate to IPO than they made it seem. Based on their recent bankruptcy they needed the public markets not for rapid growth as stated, but for their very survival.
This is probably the future of SUNworks, but who knows how long it will take.
When you miss guidance twice in a row by that much, and you reiterated said guidance in the second week of December, you lose all your credibility.
This company now has zero credibility outside those who have a personal loyalty to the CEO.
He claimed the miss in Q3 was because they were doing those projects in Q4, which apparently was not true.
It will be worse.
Chardan just downgraded SUNW to Neutral.
No 10-K until March 29th, these are unaudited results.
I don't think he even cares anymore, he just makes up random stuff that sounds good and then goes back to collecting his salary from his house in Santa Barbara while the company is figuratively (and last month literally) taking on water.
That Elite number wasn't from 2016 though. Their data is dated.
I am aware of the context, but it applies to communications with investors as well. The weather excuse was BS and anybody who takes the time to look at the weather data knows it. Weather was horrible in Q1 but pretty normal in Q4.
Very people people take anything he says seriously anymore outside of the super secret fan club.
"once you have a lousy reputation it's very difficult to convince people..."
CEO Jim Nelson,
ROTH SUNW presentation,
30 seconds ago
Here is what Nelson said half way through Q4:
(From the Q3 conference call)
Sorry to those who had hope this would go better, the CEO is a great salesman but a poor performer.
This is basically a bear case. Included are:
-Nelson manipulating accounting by scrapping quarters and years
-The joke that is the fake solar cell
-Saying what was originally supposed to be a great year is actually going to be scrapped, and that it is a good thing this is happening
-Not expecting a turnaround from a multiple year low until Q3 2017
The bull case is now worse than my own bear case was as of a few months ago.
If youve seen the number 16 pop up on social media and signatures related to this company, here is why.
There is a map showing up on the Sunworks site with 16 states highlighted, which I found earlier when it was vaguely mentioned in the form of a Dora the Explorer clip.
Somebody contacted the sales team at the company asking them how they might go about buying solar in those states. They have not gotten a response yet.
I encourage people not to buy based on this rumor until the company confirms they are actually selling solar there. If nobody can get somebody from the company to help them buy solar in those states, this is a strong indicator that they are not selling solar in those states.
The entire rumor is based on a badly drawn map on the contact page of the company website. The bull case really has gotten this weak.
It is my belief that the person, a company executive, is using a new account made in August.
Not being able to get institutions to buy your stock in large amounts is not a good thing. It is still very low by the way. But getting lots of them to do it doesnt mean nothing bad will happen.
Moon is right about the article.
To add, most bot-driven articles pull their data from Zacks. Zacks themselves has most of their articles written in this way their own databases. In the last few years Zacks has been selling these datasets which has led to the proliferation of hundreds of websites publishing articles written by bots using their data.
Example of that here: https://www.quandl.com/publishers/zacks
It doesn't come cheap, around $900-$1200 per dataset per year. If you want higher quality articles then you either need to build your own database or buy access to several of them.
In any case Zacks has an estimated date for earnings on the 13th, but that is simply based on their best guess based on other years. It would be absolute lunacy to release earnings AM Monday with no prior announcement.
The article is only has good as the data it pulls from, and that data is just a guess at this point.
3. There aren't very many and most of them are from index funds which own a small piece of thousands of companies.
Institutional ownership is still only 8%, that's nothing. Sure it's better than 5%, just like it would be better to have $20 in the bank than $5. It's still not very much at all.
SUNE had A LOT more institutional ownership right before they went bankrupt and investors lost everything.
Obviously there the data is a little funky (probably some sold to others and the buyer reported before the seller, so there was a little double counting). But SUNE was almost 100% owned by institutions, very little retail:
If 8% institutional ownership is supposed to save this company, why didn't nearly 100% institutional ownership save SUNE?
In my view it's a rather ambiguous metric that can mean different things depending on the situation. It's not always good, and not always bad. When it is as low as it is here, it means almost nothing either way.
I didn't say it MUST be true, I said it's very likely to be true.
As I said I am very confident about this, but not 100% certain. So I am not going to go further than what I already said.
EARK added 150M~ market cap (on low volume) with the only news being they created $700,000 worth of convertible debt (owned by company management).
This is a company that lost $6.5M dollars on $5M in revenue last quarter.
EARK probably deserves more scrutiny than it is getting.
SUNW longs probably jealous haha, if this stock ran up because of convertible debt they would all be rich.
Well actually SUNW did run-up a few years ago when the debt was created, that was the pump phase. We have been dumping for a while now.
You would hope that SUNW can do better than a company that lost shareholders 99.5% of their money in the last 18 months. RGSE makes SUNW look good, for now. If I recall RGSE expanded to many similar states before they entered their death spiral.