SPDR S&P 500 (SPY)

[Scripo]

Markets got it right this time. Guys you cant dispute this..

ActiveTraderPro.com BannerPrint Print
A A A
All Content and Data provided by Third-Parties — Terms of Use
Auditor warnings on large company solvency reach highest level since crisis
MARKETWATCH 10:53 AM ET 4/13/2016
Symbol Last Price Change
AMBC 16.25up +0.39 (+2.46%)
MNKD 1.7282up -0.1218 (-6.58%)
LINE 0.47down -0.0063 (-1.32%)
LNCO 0.4902down -0.0128 (-2.54%)
UPL 0.6431up +0.0422 (+7.02%)
SGY 1.13down 0 (0%)
SGYP 3.06down -0.035 (-1.13%)
AEGR 3.38down +0.18 (+5.63%)
IPI 1.1down +0.02 (+1.85%)
BTU 2.07down 0 (0%)
CZR 6.95down +0.1 (+1.46%)
GM 30.739up +1.029 (+3.46%)
QUOTES AS OF 11:53:40 AM ET 04/13/2016
Auditors have made more warnings about the possibility their big clients may not survive than at any time since the financial crisis, according to Securities and Exchange Commission filings.

Company annual report filings with the SEC for 2015 show the highest number of auditor going-concern warnings for large companies since 2008, the height of the financial crisis, according to Audit Analytics.

A going-concern warning --where auditors signal there is reasonable doubt the company can remain solvent over the next year-- can lead to a bankruptcy filing.

Ten large public companies -- including 3 pharmaceutical and 4 energy companies --reported a going-concern warning from their auditor in their 2015 10-K. That's the highest number of large public companies fighting potential permanent insolvency since 2008 when 20 companies got the warning. A large company is defined as one with a market cap of $700 million or more in public float.

The ten companies with this warning on their 2015 10-K are: Ambac Financial Group(AMBC) , Mannkind Corp(MNKD) , Linn Energy LLC(LINE) and LinnCo LLC(LNCO) , Ultra Petroleum Corp(UPL) , Stone Energy Corp(SGY) , Synergy Pharmaceuticals(SGYP) , Aegerion Pharmaceuticals(AEGR) , Intrepid Potash, Inc.(IPI) , and Peabody Energy Corp(BTU) .

Peabody Energy (BTU) filed (http://www.marketwatch.com/story/bankrupt-peabodys-stock-plunge-to-around-1-in-one-chart-2016- 04-13) for Chapter 11 bankruptcy before the opening bell on Wednesday.

Rose Alinaya, Mannkind's(MNKD) senior vice president of finance and principal accounting officer, told MarketWatch, "Given our 12/31/15 cash runway, we have fielded concerns regarding bankruptcy. We continue to explore options and, from my desk, bankruptcy is not one of them."

Responses to requests for comment sent to Ambac, Linn Energy(LINE) and LinnCo(LNCO), Ultra Petroleum(UPL), Aegerion Pharmaceuticals(AEGR), a Synergy Pharmaceuticals(SGYP), Stone Energy(SGY), Intrepid Potash(IPI), and Peabody Energy(BTU) were not received.

Caesars Entertainment (CZR) got the auditor's warning for 2014, prior to its January 2015 bankruptcy filing. Investors in Ambac Financial Group(AMBC), the bond insurer got advance warning, too. Ambac's auditor, KPMG, has warned in its opinion about the company's potential imminent demise every year since 2009, even though Ambac emerged from bankruptcy in 2013.

Although General Motors(GM) was on the list in 2008, none of the large financial services that were forcibly acquired, effectively nationalized, or bailed out were given a preemptive going concern warning by their auditors.

The top two reasons auditors cite for giving a going-concern opinion, according to research firm Audit Analytics, are "net losses since inception" or an "absence of significant revenues." But that's not what ails these large, established companies. Olga Usvyatsky, the vice president of research at Audit Analytics told MarketWatch, "For large oil and gas companies, liquidity concerns were cited as one of the most common reasons for the going-concern opinion. For large pharmaceutical companies, on the other hand, concerns about operating losses prevailed."

In January MarketWatch reported (http://www.marketwatch.com/story/almost-half-of-ipo-filings-include-an-auditor- warning-about-potential-failure-2016-01-21) academic research appearing in a professional journal specializing in auditing showing the percentage of companies between 2000 and 2009 that had received a going-concern warning from auditors in the year prior to bankruptcy ranged from 51% to 59%.

-Francine McKenna; 415-439-6400; [e-mail]


(END) Dow Jones Newswires
04-13-161153ET
Copyright (c) 2016 Dow Jones & Company, Inc.