Photo: Focus Media
Focus Media shares nose dived after research firm Muddy Waters issued a “strong sell” rating for the Chinese company, according to Benzinga.From the release:
Muddy Waters rates Focus Media Holding Ltd. (NASDAQ: FMCN) shares a Strong Sell because of significant overstatement of the number of screens in its LCD network and its Olympus-style acquisition overpayments. The $1.1 billion in write-downs from its acquisitions exceed one-third of FMCN’s enterprise value, making FMCN’s acquisitive behaviour more destructive than Olympus’s to shareholder value. FMCN insiders have sold at least $1.7 billion worth of stock (two-thirds of FMCN’s enterprise value) since FMCN’s IPO. At the same time, the insiders and their business associates further enrich themselves by trading in FMCN assets, while costing FMCN shareholders substantial sums of money.
Shares of Focus Media tanked more than 62% Monday.
People must be so interested in this that it’s slowing down Muddy Water’s site. We’ll post the note as soon as we get it.
Muddy Waters is the same research firm that called foul on Chinese timber company Sino-Forest.