The news should have been announced before August 20 when the stock was above $13. The news story about the accounting has huge holes. They say only 7-8% of the revenues that should have been reported in the 3rd quarter, got counted in the 2nd quarter. If you have "more revenues" then you should be able to meet or beat the 11 cents estimate. You have 7-8% extra revenues from the upcoming 3rd quarter and you still have a 75 cent loss (or was it 74 cents) Now you know you are going to come up short 7-8% of revenues in the 3rd quarter may mean another loss.
It must not be today or the news would be on their website. We think there could be one or two things going on. Since the court told Mellon and Marvel to negotiate a settlement, that can be causing a delay because Marvel needs to know the legal damages to properly report cash on hand. Also, there could be pending acquirers who are saying "settle with Mellon" and we can talk takeover. The insiders are from the same family (?) They have seen their $16.25 stock go down to $10 last week and now $11.10. With legal challenges, a lagging stock price they may decide to sell the company or at least try to get top dollar for their wireless unit. But, if the wireless unit is the crown jewel, why sell that? If they may be going private they are not required to report earnings and if for some reason the earnings are bad why report them when there is a pending go private. No rumors floating around so the talks if there are any must be very secret. We are long the stock and sold the Sept. 11 $12.50 calls, we are long the Sept. 18 $13 calls and long the Jan. 2016 $10 puts and sold the Sept 4 $10 puts. We sure hope there is no issue like a restatement of earnings going back many quarters or other very negative news. Why did they meet earnings report dates the last few years and suddenly on the morning of the date of August 20th they announce a delay? They knew the numbers on July 31. It has to be very good news or very bad news. We favor the good side.
Seeking Alpha has a long story on the legal matter dated Sept 1. Here is part of it: Although past mediation efforts have proven unfruitful, Judge Fischer wants the parties to give it another go. Dkt. 982. She recently ordered CMU and Marvell to see a third mediator, Thomas Frampton, a former state trial court judge and a practicing trial lawyer. Id. The parties must notify the district court of the mediation date by September 11, 2015, and must mediate before October 31, 2015. Id.
Also, the article said the matter could take "years to settle" and may end up in the Supreme Court. The inventors could die by then so they may want to settle. So a couple dates set by the court for a mediator is Sept 11 and Oct. 31.