AP Last Call: Focus Media Falls Monday March 17, 4:00 pm ET Focus Media Shares Fall Ahead of 4th-Quarter Report
NEW YORK (AP) -- Shares of Focus Media Holding Ltd. fell to a new year low Monday in advance of the Chinese out-of-home advertising network operator's fourth-quarter report, which is set for Tuesday. The company's American Depositary Receipts sank $8.56, or 19.5 percent, to $35.29. Earlier, the stock traded as low as $29.25. Previously, the stock had traded between $34.57 and $66.30 in the past year.
Beijing-based Focus Media runs an network that includes advertising through flat-panel screens and poster frames at various commercial locations, and via cell phones.
Focus Media predicted in November that it would report fourth-quarter adjusted earnings of 48 to 50 cents per share on revenue of $160 million to $170 million.
Analysts polled by Thomson Financial expect the company to report earnings of 48 cents per share on $168 million in revenue. The estimates generally exclude one-time items.
Some analysts attributed Focus Media's Monday share decline to investors overreacting to speculation that the company lost its service provider license.
Focus Media could not immediately be reached for comment.
"After talking to management, we think it may not be easily verified that its (service provider) license has been revoked, because the company is not a wireless content service provider. It charges advertisers rather than consumers," Susquehanna Financial Group analyst C. Ming Zhao said in a client note Monday.
Conversely, companies like Chinese wireless entertainment provider Kongzhong Corp. would need such a license because they send out short messages and charge users for the content, Susquehanna analyst Haiya Gou said.
In a phone interview, Pali Research analyst Tian X. Hou said speculation that the company lost the license -- which she attributed to a March 15 report on the state-run CCTV -- triggered the share sell-off.
Hou said she spoke with the company and it does not even have such a license.
"They don't need the license. They don't have it. How can you revoke a license that doesn't exist?" she said.
She added that a part of the same CCTV report that indicated Focus Wireless' advertising unit obtained cell-phone numbers illegally was not true, and she said Focus Media denounced both issues through Chinese media on Monday.
There you go....Like I said, it was a false rumor so that the shorts could cover right before their blow-out earnings tomorrow....oldest trick on Wall St. Glad I loaded today at 32 a share. Screw you shorty!