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  • jantrou jantrou Nov 18, 2011 5:03 PM Flag

    Price manipulation very probable

    It is strange that in the western media coverage of the Olympus scandal every sentence was twisted to make the bad news seem even worse (e.g. as if delisting means the shares becoming worthless).

    Now we have the New York Times $4.9 bn hole story. What to think about it? This story seems to be planted to depress the share price maybe due to short coverage or a takeover of the medical unit.

    I mean come on.. is it possible for Olympus to have falsified their accounts by $4.9 bn? Not their investments, imposible as there is not as much. But cash, yes. I hinted at the possibility and that is the very possibility that could tumble Olympus.

    Yet the story wants us to believe Olympus paid out $4.9 bn on acquisitions / fees etc. without the amounts being recognized in the books. How? I think Olympus did not even pay out that much (gross above 6.3 bn). Remember Gyrus was 2 bn and they recognized it in the books. If the NYT story is true Olympus would have paid out more than $8.3 bn for acquisitions.

    There has to be something mixed up, it's a pitty they didn't give us more detail.

    Investigators of course will examine ALL investments. That means if Olympus sold $500 mio and invested $500 mio somewhere else there is a zero net investment but $500 mio for investigators to examine nonetheless. So the gross amount to be examined could be $6.3 bn

    If true and Olympus paid out $4.9 bn in unaccounted money into dark channels that would imply Olympus true earnings would have been $4.9 bn higher than reported on the other hand.

    It's really a pitty. That story can't be true as reported.

    Then again the official story (see my other postings) so far has one main flaw: Why was Woodford made CEO in the first place??

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    • At current price level, almost all the bad news out are baked in. Giving the complex nature of the tractions and the accounting firms involved, most likely the panel will not have the investigation report out by the first week of December.

      Yes, I am long and wrong, so far. I am looking for the adr going back to stay ~$13 when the panel report is out. Simply, lots of bad news are in the stock already, so there should be a relief rally, unless there are other hidden problems yet to be out. If the numbers are around what is known, it could be back to the high teens. Until we get some clarifications on what is on the book, this thing is going to be depressed.

      What is your price range for the adr giving what is known? Thanks.

      • 1 Reply to wong729
      • I think equity could be worth zero. Hard to believe, I know, but if they have skimmed off 5 billion and you have 7 billion of debt, an acquirer could maybe offer 7 to pay off the debt and that's it.

        You also have to remember the overhang of lawsuits. The suits could be in the billions. We still don't know the depth of the rot.

        Doesn't look good to me.

    • 57 acquisitions with $4.1 bn total.

      The story reports $6.4 bn with fees and payments.

      The NYT story is wrong because all those 57 transactions were properly recognized in the books.

      $4.1 bn (including Gyrus) must be examined by prosecutors. Everybody knows there's something fishy about ITX.

      Make no mistake, those transactions even when done in a correct way were a waste of shareholder money.
      But the NYT article follows its own agenda.

      We have a force in the west that wants Olympus share price way down.

    • Your last question is a really good one. I had not thought about it. Maybe K-kawa's conscience was bothering him? But if so, why did he then fire him?

      • 1 Reply to four_stout
      • You have to take into account the Japanese mentality. We do not know who is good and who is bad.

        Is Kikukawa really that bad? Remember Olympus 10 years ago. Hardly a company I'd invest into. And Olympus would have gone bust in 2001.

        Is Woodford really good? I like him, but can't take a look behind the scenes. If Kikukawa had stepped down would he have become chairman withour making anything public?

        Maybe the whole thing is orchestrated and Kikukawa and Woodford still act in an orchestrated manner. That third possibility would hint strongly to anti-social involvement.

        Then again the Kodo-kai are not known to extract that large amounts.

        To me it was clear from the beginning that neither the cultural differences story nor the personal enrichment version could explain the facts known so far.

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