Good look at things. I have a different view. Fixed assets have almost doubled in two years (2012 to 2014). The 'income' that is claimed in the financial statements almost certainly does not exist and the fixed assets are over-valued and or do not exist. This is all going on while sales are going down. A balloon made of lead can only fly for so long. Soon, in the next 24 months, the truth will need to come out. At some point the money runs out.
Imagine if some of the debt that was unsecured was replaced with secured debt that would be the lead in a bankruptcy case. No. That wouldn't happen.
Agreed. Last offer fell through. Reason was never disclosed, but they had to pay $50M to walk away. So whatever they found, scared them quite a bit.
If you really are J Sellitti, my only question is have you formally complained to the SEC? Posting to a Yahoo message board is going to do nothing other than give the trolls more food.
Spencer and Busshaus should be facing felonies and jail time and definitely should not ever be allowed to be officers or board members of publicly held companies.
The guns came out when hundreds of millions of debt (unsecured) due 2040 was moved to secured due 2020. LG pulled out the guns and pointed them directly at CLF shareholders' heads. He knew the endgame and wanted it to be on his terms and he knew he wouldn't be around in 2040.
The company owns its financial statements. Auditors do not own their clients' financial statements. Investors, lenders and other stakeholders may rely on the auditor's opinion under many circumstances. The company is the most culpable, the auditor is next on the list. Unless the auditor did something outside the norm, for instance the auditor told the company to use a certain accounting method, there should be no reason to believe the auditor did anything wrong other than not discover the COGS misstatement. This would be negligence, most likely.
Big concern is inventory. How do you lose 50% of sales, lose your biggest customer and inventory stays the same. My guess is there is no outlet for a big piece of inventory and therefore has little to no value according to GAAP.
So, if I'm right, inventory will be revalued with no incoming cash. Bankruptcy will be forced within 12 months. If I'm wrong, there's at least $10M of cash available in inventory. There will be a big race to turn that into cash before there's a forced bankruptcy.
CPA firm is in legal trouble, then so is management and BOD. CPA firm can be negligent (many types) in not discovering misstatement, but the numbers are owned by management, not the CPA firm.
Given all that is going on, the market is telling you that no one really knows what book value is at the moment. Things will sort themselves out in the coming months. I'm a few hundred shares in, waiting for a bottom, more DD in the meantime.
The company just said COGS was understated, which leaves inventory overstated. The question is by how much... For value investors this may move the needle a minor amount but dents trust quite a bit, for growth and momentum investors, this will be a / has been a huge issue.
Thanks for the 'heads up'. I'm assuming if I ask for certificates to be issued then there would be a fee but no admin fee when it is dead. I'll look into the various options. I'll sell or take a rough piece of toilet paper.
I've been following the stock for a few years. Get in between $7 and $9 get out between $10 and $12. The one thing that is scary is the buyout that fell through. The private equity suitor paid millions to walk away. Who does that unless they found something in due diligence that was 'irregular'? Nothing has come of it so far, but my guess is there's a ton of $s to be written off. Its possible the cash flow statement is misleading and that $s are coming from vendor financing and that inventory is overstated. This looks like a bargain. PBY doesn't move and produce like the others in this sector. So definitely red flags exist.
Compare PBY to all competitors either retail and/or service. I'll bet PBY is the lone dog. I'm long, but I'm also wondering what lurks in the balance sheet such that this hasn't moved one bit.
This is already beat down. The recent debt swap sets this up for bankruptcy in 2020 if not before. Only good news in the next 12 months is that preferred shares will convert to common and the $50M in dividends to preferred shares will go away. $50M is only a drop in the bucket compared to the debt load.
CFO leaving before earnings means that CEO doesn't like the earnings and would rather have someone he can push around to make the numbers look better. CEO definitely wants to control anything and everything that might be a negative. He dumped on the analyst because he didn't like his answers. He dumped CFO most likely for the same reason.
I don't see upside in this stock for at least 24 months. Still 100% downside risk for the next 4 years or so.