Is the company a very clever fraud? If so, it has fooled a lot of smart people including the world’s no1 auditor.
If the company is not a fraud you will be rewarded for having the patience to hold the stock i.e. you cannot lose.
DTT signed off on the 2009 10K.
I don’t think DTT are feeling much stress from the short attack on CCME. We tend to transfer our own huge collective concern onto the actors.
They will just want be extra cautious and steady with this audit, since aspersions have been cast.
Like CCME, DTT will certainly stand by their work and not answer to anonymous bloggers.
DTT is bigger and far more credible in the financial markets than any hedge fund/s behind the short bloggers. They will be sure to be accurate but will not be defending themselves or feeling the need to cover their ass in any way.
DDT is only answerable to the auditing standards expected of them and over and above these by choice/agreement with CCME.
It is now so late in the piece that a DTT resignation over something unexpectedly revealed must be extremely unlikely. If they havn’t already finished the audit any delay now should be over minor issues.
Nor will there be any second forensic audit, since the company has engaged the world no1 to do this audit, who are not answerable to unsubstantiated allegations.
Shorts have been inadequate in proving fraud. They have made the claims, proof is incumbent on them.
The company has shown that rather than give credence to bloggers, they will stand by their operating performance.
I think the company’s silence during this last period of short blogging attacks, speaks more to their refusal to be defensive by attempting to justify themselves to baseless accusations than anything else.
Many longs assume if the company had been far more reactive with PR’s then the stock price would have performed better.
That is not necessarily the case, they may just have added fuel to the fire in a shit fight and end up being seen as ‘protesting too much’.
Moreover the short bloggers vacuous claims invite them to stoop to the level of the ridiculous.
As for this halt, needing an extension with the 10K doesn’t justify a halt. They would file an NT with an unaudited pre announce of NI as they have done a number of times already. This has always led to a stock price rise on favorable earnings growth news, not a fall on the delay news.
If something negative has come up with the 10K at almost the last moment, that would be very unlucky timing so late in the piece and makes this unlikely IMO.
Yet ‘something’ wrong with the audit is almost the only possible negative that could be at this time, unless something totally unexpected has happened, which OK, is always a possibility in business – again an unlucky coincidence in timing.
Yet since management and more likely the board, needs to decide something, we wait until they can all come together and decide it.
Anything less would have seen a filing or PR of some sort out on Friday, rather than a halt (even if such PR was worded by their legal counsel - if they actually are in between IR firms, which I doubt is the case at this very important period of communication for them)
I don’t think a PR saying we are halting the stock for the board to meet and discuss’ something’ is very helpful. They hardly have a history of releasing puff piece PR’s, rather they have always released specifics not spin. They will PR on the actual news of their decision.
I don’t think anything the company itself has planned in the way of a new initiative (except maybe a potential acquisition or something they feel they need to act fast on) would be so urgent that they must halt the stock, thus the business proposition must more likely be to CCME from another party.
If they are considering a potential stake/new ownership structure – possibly hostile?/takeover offer, then a halt to prevent any potential leak or insider advantage is not only prudent but required for something so material to be decided.
Long interests are preserved by the halt, assuming the board is indeed meeting to discuss something potentially advantageous. If so, then it’s shorts that face a potential gap up on the news.
In my ignorance, I’m guessing an offer of some sort, likely to be low ball by longs expectations (and management and boards also IMO) However a 25% gap up on a floor price low ball initial offer of $15 would be a good start to a trading resumption.
However, I ultimately don’t think CCME will accept any offers from anyone because there are too many potential exciting growth opportunities that make the untapped potential far more enticing and interesting than giving an interest away now, even at 2, 3 or more X current SP as far as management is concerned.
The company is virtually first mover with a moat in a still quite nascent advertising market , so there is no telling how high they can go, that’s gotta excite management and not just for the money.
The PE’s of some great businesses are now so low that it must be inevitable that offers of all kinds will occur. It’s patently obvious that these companies will fetch much higher multiples on domestic China exchanges and the US also once the FUD stops and enthusiasm returns. Buyers need to be sure of the veracity of their target, clean 10K’s from top flight auditors crucial.
Who knows, since FMCN also has the benefit of Deloitte’s services, perhaps they got first whisper on a solid CCME 10K is, on that basis, certainly a better potential stake for them than VISN was.
FWIW
