AKvetch...
As I understand it, TYC said last week that they will not be in a position to sign the "we ain't lying" pledge because there has not been enough time for their accountants to go through their complicated books, but they would let us know as soon as the process is done. That was hardly a resounding vote of confidence in the books, and that followed by today's resignation (?) of the CFO and lead counsel certainly brings up the possibility that there are problems in da books.
Another problem is the potential backlash against companies that have moved their domicile offshore for tax purposes. There are at least two measures before Congress that would forbid the government to do any business with such companies, and I suspect that feeling is more widespread than just the government.
TYC has a negative real net worth, and should have very large write-offs coming from the CIT spinoff. Their debt situation is such that they are effectively barred from the commercial paper market and they have drawn down all their bank lines. In an increasingly conservative and tightening credit market, ratings downgrades or a mistep could be disasterous.
Finally, their choice of a new CEO from MOT was greeted with enthusiasm by the street, but it escapes me as to why that was so. For my money, the worst managed large companies in the US the past few years have been MOT and LU. MOT has written off more "one time charges" quarter after quarter to dwarf the GDP of many countries yet still cannot make a true profit and are still laying folks off. One of the largest chargeoff centers for MOT was the broadband division, run by "guess who" - Mr Breen, the new CEO of TYC, and that comes as the SEC is investigating those chargeoffs under his tenure at MOT.
I have long thought that at a minimum TYC is a candidate for the sub $5 club, and a realistic candidate for bankruptcy.
Just my opinion, though.
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