given2invest
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Posts posted by given2invest
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From WSJ:
"I have been a CEO for 27 years in two companies, and my interest is in growing companies," he said, adding his goal is to build an entity of his own that's similar to Berkshire.
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:o Any lessons to learn from this?
Don't be greedy?
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$10 million in stock is no joke.
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While not illegal, it's pretty immoral he was buying stock in Lubrizol while being in charge of identifying chemical acquisitions for BRK.
http://online.wsj.com/article/SB10001424052748704517404576223383008589922.html?mod=googlenews_wsj
It was Mr. Sokol, a Berkshire executive, who plucked Lubrizol from a list of 18 chemical companies that bankers at Citigroup Global Markets had compiled in December 2010 as possible acquisitions at Mr. Sokol's request, according to the filing.
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that's why nobody but you went to see it
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All three are obviously huge companies. The result of this is that within each of those three there will be great teams and projects to work on, and lousy teams and projects to be working on. These factors would matter to me more than the general company.
What this guy said. Or, get a job at Goldman Sachs.
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Yes, I own another chunk(1000) which I bought them in 2009 for much lower price. So, I own 1200 now. As you can see this is not an exact replacement at all.
if you owned 1000 (1200 now?) shares prior to buying 800 shares which you then sold at a loss within 30 days then, yes, it should have created a wash sale.but your loss would cause an offsetting increase in your cost basis on your older 1000 shares. when you sell those you effectively realize your earlier deferred loss on the 800 shares.
i've noticed that my brokerage, fidelity, on a buy & sale of a 1000 shares (and assuming i didnt own any older shares bought before then, unlike the case you present) will generate a wash sale on the earlier batch of sold shares (say the 1st 500) along with a disallowed loss on them but the later batch of sold shares (the last 500) make up for those because they were given a higher adjusted cost basis equal to the losses on each of the earlier wash sale shares.
Yes, you created a wash sale. There is no error. It will change your cost basis on the remaining shares you have. It doesn't have to be an exact replacement - you can't claim the losses on any of the shares since the total number is less than the 1000 you owned prior.
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Did you own any of this stock before you purchased on 4/27?
If you buy 30 days before a sale as "replacement stock", that's also a wash.
For instance: I own 10,000 shares of XYZ @$3.00 i bought 9 months ago
I then buy 10,000 shares of XYZ at 1.50 and then sell 10,000 shares of XYZ less than 30 days later.
That's a wash.
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I think it's funny my targeted ad in this thread is for Sprint, probably due to me researching them a bit today.
:)
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I'll go on record saying this deal WILL go through and the only issue will be the concessions that AT&T will need to make to appease Uncle Sam.
You're not being so bold. The way the stocks are trading, it's expected to go through. Sprint is down 15%, AMT, down 7.5%, etc.
I will go on record saying it will not go through regardless of how much spectrum they divest.
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will never be approved
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good idea for a thread
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I'll take Avanir Pharm (AVNR) with current management in place. The cash this thing can throw off in a couple of years would let me look at other areas.
I own the stock but wish it could be more
Someone just posted this as a short on VIC, fyi.
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I am like thats an ugly girl, and you are like there are no ugly girls, and I am like man thats just an ugly girl.
Haha lol
I guess my point is if CCME were to open tomorrow and start trading at a few pennies per share and the information available stayed the same, I'm sure there would be some people who would be willing to put 0.001% of their portfolio in it. The loss wouldn't be a huge impact to the portfolio and the potential upside could be huge.
Agreed it's still an ugly girl. But that ugly girl may have a rich father who can afford botox.
Breaking news: Prices in the Brooklyn Bridge just fell to 5 cents a share, down from $1. I have 1 Million shares for sale, PM me.
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This is just leverage. Nothing more. It's leverage and locking in today's 3-5 year interest rates. The "implied put" in the leap is worth almost nothing being so deep in the money and low vol of a stock.
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Can't anything be a good investment at the right price? So even at $1.00/share or $0.01/share wouldn't someone be willing to purchase CCME? One mans trash is another mans treasure and no two investors will always agree. Then again isn't investing speculating to a degree? Difference being we just look for mispriced bets.
I'll sell you stock in the brooklyn bridge for $1. it was $10 yesterday and just fell 90%. PM me.
EDIT: Should have given you more details:
Outstanding shares, 1 million. It trades on a private exchange that has very poor controls, but we can call it the "Nasdaq" for short. It's .1X FCF with no debt. It fell 90% yesterday on the "rumor" that I don't really control the bridge. Complete BS.
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Yes, I was being a dick. Sorry, I just get so angry at people who invest or consider investing in something that's so blatantly fraudulant and even after it's uncovered are even considering putting money into it. Nothing personal, it makes me sad. Didn't mean to be a dick to you.
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what do you guys think about buying calls on this afterwards? I mean, they should be super cheap. They might go out a business, or they'll bring in someone who can turn it around. Just because it's fraudulent, doesn't the company is worth $0.
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why's that? it's certainly speculative, but it's still asymmetrical. if the market misprices risk, it could pay off, especially with leaps.
BECAUSE ITS A COMPLETE FRAUD!!!!! THERE IS NO LEVEL THAT IT WOULD BE A BUY AT!!!!!!!!!
There is no real underlying business, no real profits! And the fact that you could suggest wanting to buy leaps after all of this, at any level, makes me sad as a result.
I try to look for potential value. just because something looks bad, doesn't mean it's a bad investment if you get it cheap enough.
Even the muddy waters guys say it's worth around $3.50 or so even in the case of fraud.
http://www.muddywatersresearch.com/research/ccme/irrefutable-evidence/
He said it's worth $3.50 a share IF THE CASH IS IN THE BANK. Ok, I'm done having this conversation with you. Yes, you should leaps and calls when it opens as long as its under $3. Good chance activist shareholder comes in and throws out board and management and turns it around and it spews 10s of millions in real cash flow in the future.
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Lessons learned... top notch auditor or reputable investor don't mean a thing, especially when it comes to investing in emerging markets.
To be blunt, I don't think you learned the right lesson.
A businesses numbers has to have that make sense, and management should act rationally if their business is trading at a crazy price (where were the huge buybacks with all that supposed cash they were making?). You can't blame this one on the auditor... the numbers didn't make any sense, and it was all over the internet for any to see that was the case.... why do insanely profitable companies go public via reverse mergers (a regulatory dodge) to sell themselves to retail US investors????
ANSWER: They don't... frauds do.
Oh yeah, and this fraud was perpetuated in the US, not in emerging markets.
We all have to own our mistakes, the auditors don't get to be your shield on this one... Starr is a tough one, but we all have to do our own research. By the way, the 10-Q's weren't even audited, which as MOI pointed out is why the fraud went down now (10-K time).
Ben
Excellent post. In a post Enron world, it's amazing how so many hung their hat on the auditor and a bucket research shop (global hunter) and dismissed the short reports as "blogs". The Starr investment is the sole reason the stock got any traction. I wonder if the people there realize how much their investment cost the average Joe who followed them into the fraud.
I was thinking yesterday - imagine if 200 shitty US small cap frauds that couldn't get listed in the US all listed on the Chinese exchange and sold billions of fraudulent stock to Chinese investors...do you think the Chinese government would just sit by and watch? Our regulators are a fucking joke.
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what do you guys think about buying calls on this afterwards? I mean, they should be super cheap. They might go out a business, or they'll bring in someone who can turn it around. Just because it's fraudulent, doesn't the company is worth $0.
:(
why's that? it's certainly speculative, but it's still asymmetrical. if the market misprices risk, it could pay off, especially with leaps.
BECAUSE ITS A COMPLETE FRAUD!!!!! THERE IS NO LEVEL THAT IT WOULD BE A BUY AT!!!!!!!!!
There is no real underlying business, no real profits! And the fact that you could suggest wanting to buy leaps after all of this, at any level, makes me sad as a result.
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what do you guys think about buying calls on this afterwards? I mean, they should be super cheap. They might go out a business, or they'll bring in someone who can turn it around. Just because it's fraudulent, doesn't the company is worth $0.
:(
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They have a real auditor and a growing cash pile. If the company was a fraud, there is no way in hell that Deloitte and Touche would not have unearthed the inconsistency in their findings.
A few years ago a Chinese company called China Expert Technology (CXTI) was discovered to be a fraud. They also had a brand-name auditor if I recall correctly (a member firm of BDO Seidman?). Here is how CXTI did it: The auditor signed off on their year-end financial statements, for our purposes this might be December 31, 2009. The subsequent quarterly statements are unaudited, so management can invent them if they wish to do so. The next audited financial statements for the year ending December 31, 2010 would not be due until March 31, 2011 or June 30, 2011, depending on whether the company files 10-Ks or 20-Fs. So, management has more than a year to put out fake quarterly financial statements in an attempt to get the share price up while disposing of their own shares in the company (probably without making the requisite SEC filings), and/or stealing the actual cash on hand.
This seems to be what CXTI did -- they disclosed a relatively modest cash number in the yearend audited financials (this was cash from the IPO or something like that). Then in the unaudited quarterly financials they made it look like cash was growing by leaps and bounds and the company was performing incredibly well. By the time the next year's audited financials were due, management had stolen the actual cash that was there and was gone without a trace, and U.S. investors (including Jeff Feinberg's fund) were left holding the bag. There was never any kind of justice nor did U.S. investors see a penny.
What's interesting with CCME is that we are also seeing a very rapid increase in cash following the audited financials as of yearend 2009. At December 31, 2009 cash was $57 million. Then on March 31, 2010 it was $114 million (unaudited), and on June 30, 2010 it was $139 million (unaudited).
I don't get to toot my own horn too much, but in this case, I think the analogy to CXTI was spot on. Back in September I said that the CCME fraud could go on until the audited annual financials were due. I think this type of fraud should be added to everyone's mental model -- just because the unaudited quarterly financials look good, it doesn't mean that the audited annual financials will look as good or even be released -- ever.
I was thinking of your words when trading was suspended ;D It got me thinking. Since these fraud's are so easily spotted, surely it's a simple case of shorting them at the start of the new year - waiting two or three months for the auditors to come calling, have the fraud exposed and make a lot of easy money? You'd have to be fairly certain the company was a fraud, of course.
1) CCME wasn't borrowable recently and if you did get any shares the rebate was neg 80-100
2) The puts were INSANELY expensive so you'd have to time it perfectly. But yah, buying march puts would have worked.
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its over
very sad
China MediaExpress Holdings, Inc. Announces Resignation of Independent Auditor and Chief Financial Officer
FUJIAN, China, March 14, 2011 /PRNewswire-Asia/ -- China MediaExpress Holdings, Inc. (NASDAQ: CCME) ("CME" or "Company"), China's largest television advertising operator on inter-city and airport express buses, today announced that the Company's registered independent accounting firm, Deloitte Touche Tohmatsu ("DTT") has formally resigned its engagement by the Company as of March 11, 2011. Following the receipt of the DTT resignation letter, on March 13, 2011, the Company received notice of the resignation of Jacky Lam from his position as Chief Financial Officer and director of the Company, effective immediately. As a result, CME will delay its fourth quarter earnings release and will not file its Form 10-K for the fiscal year ended December 31, 2010 by March 16, 2011, its original due date.
The DTT resignation letter stated that DTT was no longer able to rely on the representations of management, and recommended that certain issues encountered during the audit be addressed by an independent investigation. DTT's letter also stated that these issues may have adverse implications for the prior periods' financial reports and that, in their view, further investigatory procedures would be required to determine whether the prior periods' financial reports are reliable. Upon receipt of the formal DTT resignation letter, the Company requested the suspension of trading in the Company's common stock on the NASDAQ Global Market to permit full disclosure of DTT's resignation to be disseminated to the public.
The Board of Directors of the Company met over the weekend of March 12-13 and confirmed its intent to authorize an independent committee of the Board to launch an investigation with respect to the concerns of DTT, which committee would be authorized to engage a forensic accounting firm and independent legal advisors, and initiate a search for a new CFO a new independent auditor. The Company expects that the announcement of final results for 2010 and the filing of its Annual Report on Form 10-K could be delayed for at least a month to permit the completion of all necessary fieldwork of the new independent auditor and to complete the independent investigation of several potential issues raised in the DTT resignation letter.
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Myth,
Ya my 80%-fraud quote was from Lei Zhang. Anyways, I don't think you literally put a 2% probability of fraud based on the thread title.. just that you phrased it that way. Btw, I like your thesis on Petrobank and have entered a considerable position.
Tim,
Yes all along I am on high alert for fraud. I will be the first seller if one day Deloitte resigns as auditor or Starr exits their position.
I think the company has some moat, not large but some. Their large bus network provides a valuable ad distribution network that's not matched by many competitors. This will allow them to retain the customers even if they lose their monopoly status. They also seem to have good relationships with governments which are hugely beneficial in doing businesses in China. I agree profit margin will reduce in future years since concession fees CCME pays to bus operators increases at a high rate annually, but the continued increase of ad rates and number of buses should mitigate this. Of course all of these hinge on the company is what it claims to be.
"Yes all along I am on high alert for fraud. I will be the first seller if one day Deloitte resigns as auditor or Starr exits their position. "
Not to rub salt in your wounds (we don't even know why it's halted) but did it occur to you that the day deloitte resigns or Starr exits CCME is a sub $2 stock? Starr is the only reason people aren't 100% sure it's a fraud. I learned a few years ago when I invested in a company that's called optionable that just cause a smart, large, outside investor buys a stake in something doesn't mean it's not a fraud. A multi billion dollar exchange, CME I think, bought a big stake in it and it ended up being a 0.
David Sokol Resigns!
in Berkshire Hathaway
Posted
Why does that matter? Being acquired for cash. He probably still has them. The WSJ says it would show up in the proxy in a few weeks as him holding them, hence why they disclosed today.