Lots of speculation about what is going on has led me to think about what would have to be true for the speculation to be correct.
There seems to be a fear that EGMI business was a sham, that the office move was a con and that the $12MM+ shown on the BS probably doesn't exist.
I am somewhat familiar with the audit process, having been through it with a private company as well as providing due diligence records for a buy out. The first thing any auditor does is confirm cash. Everything ties to cash and the idea that Berger and Mendoza has gone 3 years without confirming the existence of this much cash is just not credible. The cash must exist, or it did until very recently which means the sales occurred!
Secondly Lord Steinberg did not build a small one man betting shop into a multi-billion dollar operation while earning himself a HUGE fortune and his investors a compounded return of over 25%, by falling off the turnip truck! This man was smart, had integrity and knew the business inside and out. You can take that to the bank. A man like this is not going to get involved with what would be for him, a small time fraud. I also do not believe he would invest over $10,000,000 in a company like EGMI without KNOWING it was for real. He had the means and the knowledge to know if it was all a con and you can be sure he confirmed the numbers and sales before he spent his money and lent his considerable prestige to the company by becoming COB! This guy made his fortune in the gambling industry and in over 50 years in the industry he had to see EVERY con known to man. I just don't believe he got skunked by the managers of EGMI and there is NO WAY a guy like this is involved in shenanigans some suspect have occurred.
My personal opinion is that the main problem lies in the values carried on the books of the investments in Rosario et al and that these will be restated. I'd guess, and it's just a guess, that this info about a restatement leaked and was the cause of the short attack over the last couple of months and that the SEC stopped trading to protect shareholders from loss due to unequal knowledge until revised valuations could be arrived at.
A misstated cash account in the UK just could not account for the length of delay but valuing a minority position in a private or thinly traded public firm can be very tough.
JMHO. If EGMI drops under $0.40 when it opens I'll be a buyer unless another shoe drops prior.
Good luck to all.
