Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Facts are neither negative nor positive (that's why they're facts). I am negative on MCTH not because I'm a former employee (which I am not) but rather because I believe the whole thing is a scam and I hate to see innocent investors get screwed by scam artists.
Since you're so incredibly bullish on MCTH, please enlighten us with any FACTS (i.e. from the company's 10-K) you have to support your views.
Based on all of my research, in my opinion:
1. The healthcare staffing sector has completely collapsed and is a total disaster right now (Fact check - see MSNW, AHS, CCRN, etc...)
2. MCTH is run scam artists who have been nailed numerous times before by the SEC. The firm is trying to hyper-inflate their stock price (A staffing company with $7M revenues and losses of $7M and a market cap of $20M? Really?) using agressive pump-and-dump techniques and dozens of meaningless press releases.
I'm just quoting facts from the company's 10-K. If anyone thinks this is a good company, or a good sector right now, feel free to invest.
FYI - the following data on the healthcare staffing sector is from staffingindustry.com. As you can see, the sector (especially travel nursing) is in the middle of a total meltdown...
• In our December staffing industry forecast, we estimated 28% revenue contraction in
healthcare for 2009 (-50% travel nurse, -30% per diem nurse, -2% locum tenens, -25%
allied) and projected 1% contraction for 2010 (-15% travel, 0% per diem, 3% locum, 2%
allied). The upcoming forecast in April should reflect slight downgrades. A preliminary
forecast shown at our Executive Forum in March projected 30% and 3% revenue
contraction for healthcare in 2009 and 2010, respectively.
Tradechamp - I find it amusing that you respond to my factual statements with childish, emotional ones. Do you buy stocks based on emotion or data? Everything I posted is in the firm's 10-K.
MCTH has so many red flags it's unbelievable:
1. Senior management has multiple past SEC investigations/issues
2. Auditor letter indicates that MCTH is a "going concern"
3. MCTH generated $7M in revenue and had $7M in losses (how does a staffing company spend $14M on $7M in revenues...), including pyaing $3M per year to outside "consultants"?
4. Healthcare staffing sector, in general, is a total disaster right now (for more data on this, look at MSNW. $300M healthcare staffing company about to go BK).
If MCTH somehow manages to sucker people into giving them $26M in cash to buy Trustaff, they can sell ice to eskimos.
Best of luck on this one.
IMHO
MCTH Management involved in previous scams...
This info is from their recently released 10-K
http://www.mcthcorporate.com/health-care-recruiter-financial-info/
In 2005, the State of Pennsylvania issued a Cease and Desist order for selling unregistered securities without filing for an exemption against Anthony Nicolosi, Joseph Azzata and Medical Connections, Inc. The summary order was rescinded as to respondents Medical Connections, Inc., Joseph J. Azzata, Anthony J. Nicolosi resulting in a 90 day bar from calling Pennsylvania, and $10,000 in legal and administrative costs.
On November 30, 2005, Mr. Azzata entered into a Letter of Acceptance, Waiver and Consent (“AWC”) with the NASD. Without admitting or denying the allegations or findings and solely for the purpose of the proceeding with the NASD, prior to a hearing and without an adjudication of any issue of law or fact, Mr. Azzata agreed to the entry of findings that from about December 2002 through about July 2003, while a registered representative at NASD member Cardinal Capital Management, Inc., and under the supervision of Cardinal Capital Management, Mr. Azzata engaged in the unregistered offer and sale of 468,439 shares of CC.Net in violation of Section 5 of the Securities Act of 1933. In addition, Mr. Azzata failed to appear to give testimony as requested. Mr. Azzata consented to the imposition, as a sanction, of a bar from association with any NASD member in all capacities.
In June 2001, Mr. Nicolosi, entered into a Letter of Acceptance, Waiver and Consent ("AWC") with the NASD. Without admitting or denying the allegations or findings and solely for the purpose of the proceeding with the NASD, prior to a hearing and without an adjudication of any issue of law or fact, Mr. Nicolosi consented to the entry of findings that he used high-pressure sales tactics and knowingly made to customers numerous baseless predictions of substantial price increases and material misrepresentations of fact in connection with his solicitation of orders to purchase low-priced speculative securities and other securities.
MSNW, $300M nurse staffing firm, is about to go BK. The healthcare staffing sector is a disaster right now…
It's unfortunate that some of the posters responding to my legitimate MCTH concerns(i.e how does a company with a hyper-inflated stock price - vs. AHS and CCRN - and a market cap of $22M raise $26M in cash) with negative personal attacks.
Pls note that I have not said one negative thing about any poster on this board but have merely been raising questions about MCTH.
Stock message boards are designed so both bears and bulls can have intelligent discussions about the pros and cons of stocks without personally attacking each other.
I, personally, think MCTH is a pump and dump scam (for the reasons I have posted previuosly) and the Trustaff acquisition will fall apart as the company will not be able to raise $26M in cash. If the company does, however, somehow manage to raise $26M you will see massive shareholder dilution and a plunging stock price.
If you disagree with my view on MCTH, I completely respect your optimistic view on MCTH and wish you the best of luck.
HOW is MCTH going to raise $26M.
There are two ways raise money, debt or equity.
Based on MCTH's horrific financials (I'm still trying to figure out how a staffing company with only $6M in revenues managed to LOSE $7M...but that's a different question), there is no way they would be able to borrow $26M.
That leaves selling equity as their only option. Selling equity = issuing shares. Issuing shares = massively diluting shareholder. Massively diluting shareholders = plumetting stock price.
If you have any other ideas as to HOW they are going to raise $26M, please share.
Tradechamp, if you disagree with my thoughts on massive shareholder dilution, pls let everyone know how you think MCTH will be able to raise $26M and not hurt shareholders.
Massive shareholder dilution is coming if MCTH somehow manages to issue additional shares to raise cash. Considering MCTH’s current (highly inflated vs. AHS and CCRN) market cap of $22M, if they attempt to raise $26M through share issuance to pay for the Trustaff deal, current shareholders will see the stock price plummet due to the massive number of shares issued.
IMHO. Best of luck to all.
Best of luck to MCTH raising the money.
I would assume that Trustaff has probably done some DD on MCTH as they agreed to the deal. Sometimes, however, privately held firms (like Trustaff) are not very sophisticated when it comes to selling their companies and they may not be asking the right DD questions.
More importantly, if MCTH had $26M in cash sitting around (or access to it via debt) they are required to report it in their SEC filings. This leaves one of two possibilities: (1) they don't have the cash and are now trying to figure out how to raise it (2) they've raised a significant amount of cash - seriously diluting shareholders - and are not reporting it to the SEC. Take your pick.
MCTH doesn’t have anywhere near the cash to close the acquisition.
According to the recently released 8-K, MCTH is going to pay $26 in cash for Trustaff. Based on their most recent financials, MCTH only has $675k in cash.
Based on these facts, I can think of a few possible scenarios:
Scenario #1 (unlikely) - MCTH has somehow managed to raise $26M dollars in equity in the past 3 months without telling anyone about it either through a press release or SEC filing (this seems unlikely considering the company’s preference for issuing press releases every 3 days). Additionally, if they had managed to raise this amount of money is would be extremely dilutive to existing shareholders.
Scenario #2 (unlikely) - MCTH has somehow managed to borrow $26M dollars. This seems incredibly unlikely considering the very tough credit markets combined with MCTH’s horrific financials (2009 - $6M revenues and $7M in losses). Furthermore, if they had secured this type of debt facility, I would they would be required to disclose it in an SEC filing.
Scenario #3 (likely) - Now that MCTH has announced the acquisition, they are trying to figure out how to raise the $26M to pay for it. They will likely try issuing new shares of their artificially inflated stock to raise cash. This will seriously dilute existing shareholders. If any institutional (or retail) investors are stupid enough to invest in this company based on MCTH’s artificially inflated stock price (vs. AHS and CCRN) then I give full credit to MCTH for being incredible pump and dump sales guys.
Scenario #4 (likely) - Now that MCTH has announced the acquisition, they will string Trustaff along for several months while trying to raise cash. If MCTH is unsuccessful in raising cash, MCTH will try and change the terms of the deal and convince Trustaff to take artificially inflated stock (vs. AHS and CCRN) instead of cash. If Trustaff is dumb enough to take stock instead of cash, then I give full credit to MCTH for being the best pump and dump sales guys on earth.
Although I am highly skeptical that this transaction will ever close, best of luck to MCTH in closing this transaction.
tradechamp - my "opinions" are based on publically available stock data that anyone can see. If you think MCTH, with $6M in revenues and $7M in losses, is a good value when it trades at FIFTEEN TIMES the revenues multiple of the two industry leaders (AHS and CCRN) that is obviously your choice. Just trying to educate anyone on this board who is not an pumper. Based on the posts, however, it doesn't look like there is anyone on here who is actually looking (or caring) about the financials/fundamentals of MCTH vs the industry. Good luck
MCTH is a pump and dump scam – IMO
Based on their 2009 quarterly financials, it looks like they are on pace to generate approximately $6M in revenues for 2009 and LOSE $7M in 2009. Additionally, MCTH’s market cap of $23M values them at a multiple of 3.6X revenues.
As a comparison, the two largest healthcare staffing firms in the nation (AHS and CCRN) trade at very different, exponentially lower, multiples.
AHS had 2009 revenues of $760M and trades at 0.4x revenues. CCRN had 2009 revenues of $734M and trades at a multiple of 0.45x revenues.
Additionally, if you go to boardcentral, you will see all of the posts hyping up this company based on absolutely zero financial information released by the firm.
This appears to be a typical pump and dump scam where the common shareholders are in for a beating.
Good luck to all on this one.
IMHO
Everyone - all the information on my post confirming Mr. Jackson's role in both Jackson Healthcare and JCN/WHAI can be found the Jackson website and/or the World Health website (JCN section).
Did Houlihan Lokey (the investment bankers who represented WHAI) REALLY try and get the best deal for WHAI shareholders or are they trying to pull a fast one and sell the company as quickly (and cheaply?) as possible to a very knowledgable JCN insider so they can collect their I-banking fees and move on to the next deal?
On the surface, it does not appear that this "stalking horse" BK bid was ascertained through a fair, competitive, arms-length "auction" process that would maximize shareholder value.
I've come across something a little weird/fishy.
1. The company that is purchasing World Health is Jackson Healthcare. http://www.jacksonhealthcare.com/
2. The Founder/CEO of Jackson Healthcare is Richard L. Jackson:
(From the Jackson Healthcare website) - Richard L. Jackson...got his start in 1978 by developing Jackson & Coker (later renamed JC Nationwide) to be the largest physician search company in the United States.
3. World Health purchased JC Nationwide (JCN) in 2004. JCN makes up the majority of World Health's revenue.
4. This appears to be a very suspicious and possibly related party transaction.
5. Was this really truly a fair "auction" if the orginal founder of the JCN is the one who actually ends up buying it World Health/JCN?
Thoughts?