tag:blogger.com,1999:blog-4815867514277794362.post594282543847911705..comments2024-03-08T06:18:28.125+11:00Comments on Bronte Capital: Focus Media - the key post: Four interpretations of the accountsJohn Hemptonhttp://www.blogger.com/profile/03766274392122783128noreply@blogger.comBlogger19125tag:blogger.com,1999:blog-4815867514277794362.post-90134679956019040732012-09-17T02:33:43.979+10:002012-09-17T02:33:43.979+10:00Not incredibly relevant, but probably a bit repres...Not incredibly relevant, but probably a bit representative of the depth of the auditors work: The gross profit number in 2008 is wrong. If you calc through to the bottom, the numbers are fine, but the gross profit number is wrong.JMnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-2302759377563038332012-09-07T15:22:55.099+10:002012-09-07T15:22:55.099+10:00this is fascinating. I love your work. Thank you f...this is fascinating. I love your work. Thank you for sharing. <br /><br />My overall question is why would anyone do this? Simply to avoid paying taxes? hah! It all seems so funny that people would go through such trouble and create such "worlds without end" simply avoid taxes. So funny to me. Of course it could also be (and probably is) money laundering so that's a rather different story then. Thanks again and keep up the good fight!Mariohttps://www.blogger.com/profile/00905402431684735610noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-48273418862295701602012-09-03T15:55:27.301+10:002012-09-03T15:55:27.301+10:00eah, please read the blog. John is often a short s...eah, please read the blog. John is often a short seller. If you happen to be short this stock then obviously you want to estimate how low the share price will go so you know when to cover. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-53925987143454624772012-09-02T22:50:54.931+10:002012-09-02T22:50:54.931+10:00Good post with good info, but please proofread it....Good post with good info, but please proofread it.<br /><br /><i>What is the stock worth in interpretation D?</i><br /><br />Why would you care? Would you seriously consider having anything to do with such ridiculous fraud? Are there not less 'muddy' waters to fish in?<br /><br />At this point I will not touch a Chinese company under any circumstances. The country and its people simply cannot be trusted.eahnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-85954978556771917382012-09-01T22:38:42.348+10:002012-09-01T22:38:42.348+10:00All those losses were in 2008 & 2009. It seems...All those losses were in 2008 & 2009. It seems that they made some high-risk investments that blew up when the global economy tanked.<br /><br />In their 2009 20-F they gave fairly detailed explanations for the asset impairments & goodwill impairments. Basically it was the macroeconomic environment as well as some new regulations in China, including new anti-spam laws.<br /><br />Although it does seem weird that they purchased CGEN Digital Media in early 2008, and then disposed of it later that same year.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-84669639769284848752012-09-01T11:18:26.258+10:002012-09-01T11:18:26.258+10:00John, could you explain option C in a bit more de...John, could you explain option C in a bit more detail. Why would this company in particular have had to pay such massive bribes in the past? Why would they need to do so again? (Isn't the controlling shareholder now going to remain a substantial shareholder after privatisation?) If the company does need to pay future bribes why couldn't they hide it by paying through a consultant/false supplier/other intermediary or through the current CEO?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-62091437154917502992012-09-01T05:29:12.710+10:002012-09-01T05:29:12.710+10:00If interpretation D is correct, maybe Olympus shou...If interpretation D is correct, maybe Olympus should send over a CEO and some auditors.KevinOn7https://www.blogger.com/profile/00795251845337342009noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-36276486995398738522012-08-31T22:56:56.889+10:002012-08-31T22:56:56.889+10:00John, did you catch that gross profit should be $2...John, did you catch that gross profit should be $270,144 for 2008 not 274,144. The remaining accounts are "right" mathematically at least. Seems an odd error to make and miss through 4 audit seasons. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-26089525800153863322012-08-31T21:42:35.523+10:002012-08-31T21:42:35.523+10:00We know that these types of business can have high...We know that these types of business can have high profit margins, and that this company was one of the first movers in China and is a market leader. The losses were largely confined to a 2 year period following the IPO. So my vote is E (which is a variation on B).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-86584416470758541672012-08-31T21:14:12.458+10:002012-08-31T21:14:12.458+10:00Citic Pacific lost US$1.6b in 2008.
Citic Pacific lost US$1.6b in 2008.<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-80885154762955919362012-08-31T12:44:53.205+10:002012-08-31T12:44:53.205+10:00Has there been an estimate of how long the due dil...Has there been an estimate of how long the due diligence period will last?Jasonnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-48673227063584579022012-08-31T11:08:49.624+10:002012-08-31T11:08:49.624+10:00Great seriles of posts. My money is on option D. T...Great seriles of posts. My money is on option D. That would be the easiest wayto fool th eauditors especially if they are straight out of Uni.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-67048046803506523582012-08-31T11:02:29.282+10:002012-08-31T11:02:29.282+10:00Sam - corrected. Thanks.Sam - corrected. Thanks.John Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-22594878247804461412012-08-31T10:50:09.865+10:002012-08-31T10:50:09.865+10:00Just a correction: 2008 gross profit was $274m not...Just a correction: 2008 gross profit was $274m not $259m (that was COGS)Samhttps://www.blogger.com/profile/16899317005228484446noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-68081233227860512042012-08-31T08:07:12.934+10:002012-08-31T08:07:12.934+10:00http://seekingalpha.com/article/837611-short-focus...http://seekingalpha.com/article/837611-short-focus-media-holding-for-maximum-loss-of-2-49-potential-gain-14-51Rowanhttps://www.blogger.com/profile/02636700896118642121noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-20384173898773024822012-08-31T06:37:43.686+10:002012-08-31T06:37:43.686+10:00There may be a an interpretation E, John:
The writ...There may be a an interpretation E, John:<br />The write-offs, sell-backs and losses on disposal are related to numerous acts of window-dressing just before Focus Media's SPO in November 2007. Company and shareholders cashed in about 888 mn$ that day, and the management may have been tempted to activate all their friends and families to sell them dozens of hot or cool internet "companies" to show the dynamics and strength of Focus Media.<br />Just have a look at a (dismissed) lawsuit against the company claiming data falsification etc.<br />http://securities.stanford.edu/1038/FMCN_01/20071221_o01c_Bauer.pdf<br />Of course the management has to get rid of these shadow acquisitions sooner or later - and the lion's share must have been written off in 2008 and 2009.<br />So we would talk about a one-off fraud five years ago.Detlef Guertlerhttp://blogs.taz.de/wortistiknoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-23674112071455229042012-08-31T06:19:20.207+10:002012-08-31T06:19:20.207+10:00http://sharecrazy.com/beta/daily/7439/sell-focus-m...http://sharecrazy.com/beta/daily/7439/sell-focus-media-holding-ltd-fmcn-nasdaq-248-for-a-good-binary-bet<br /><br />Love yr work on this. Did you follow Harbin?, a deal that defined Guanxi<br /><br />Lucian MiersAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-4558936037329869152012-08-31T04:48:36.934+10:002012-08-31T04:48:36.934+10:00I have a rule of thumb where I look at adjusted ea...I have a rule of thumb where I look at adjusted earnings period by period. In the short run, let management make their arguments for current profitability, but...<br /><br />I also look at change in tangible book per share plus dividends over a long period -- that eliminates a lot of accounting shenanigans, and reveals management quality.<br /><br />Just my 2 cents...David Merkelhttps://www.blogger.com/profile/05073877918072914309noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-23212168797648597082012-08-31T04:07:08.558+10:002012-08-31T04:07:08.558+10:00The "in store" numbers jump off the page...The "in store" numbers jump off the page. I know nothing about what has transpired with that business, but it has gone from losing money at the operating line four years ago to 60% margins at lower scale last year.<br /><br />Interesting.equitvalnoreply@blogger.com