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Replies to post #7755 on Cronos Group Inc (CRON)
02/29/20 3:01 AM
because they're[sic] earnings are considerably above projections
The investigation concerns the propriety of Cronos' accounting for and disclosures relating to its recent Lord Jones acquisition.
. . .
The transaction closed on Sept. 5, 2019 and was mostly accounted for as goodwill . . .
. . . MarketWatch reported "the deal was noteworthy for two reasons: (1) that the acquisition price was equal to 75 to 150 times the young company's 2018 revenue of between $2 million and $4 million according to a person familiar with the matter, and (2) that a fund co-founded by Cronos's CEO and a longtime director stood to collect 40% of the purchase price, including more than $20 million in fees."
Then, on Feb. 24, 2020, Cronos announced it would delay its Q4 and FY 2019 earnings release and conference call, previously scheduled for Feb. 27, 2020. No explanation for the delay was given. In response, the price of Cronos shares sharply fell.
