Tuesday, September 25, 2007
Position Update: FMCN
|07:56||FMCN Focus Media files delayed Form 20-F; co completed previously disclosed investigation into allegations (48.50 )|
|"As a result of the Audit Committee investigation of allegations raised by attorneys representing an anonymous investor, we failed to timely file our 2006 annual report on Form 20-F. The unnamed investor, described as currently holding a short position in our ADSs, alleged that: (a) Everease, a company previously run by Focus Media's founder and CEO, Jason Jiang, is a related party as a result of ongoing ties between Everease and Mr. Jiang and members of Mr. Jiang's family; and (b) Focus Media was making undisclosed rebate payments to a third-party advertising agency through Everease in order to inflate Focus Media's reported financial performance... On September 25, 2007, the Audit Committee completed its previously disclosed investigation into allegations made by U.S. Counsel to an investor described as holding a short position in our stock. The results of the investigation have been discussed with our independent Registered Public Accounting firm. Based upon its review of the evidence, the Audit Committee concluded that nothing had come to its attention - apart from the initial allegations that gave rise to the investigation - that would cause the Audit Committee to believe that we made undisclosed rebate payments to a third party advertising agency through another advertising agency, namely, Everease. We have informed the investigators that we have concluded that Everease is a related party based upon information developed during the investigation. Based upon its review of the evidence, the Audit Committee concurs with our conclusion that Everease should be deemed a related party."|
UPDATE: Attached is a special video message to FMCN shorts.
Anyone lucky enough to have some SCONes with their oatmeal this morning?
*or "madness" as it were.
The Complaint charges Jones Soda and certain of the Company's executive officers and directors with violations of federal securities laws. Among other things, plaintiff claims that defendants' material omissions and dissemination of materially false and misleading statements concerning the Company's business, operations and prospects caused Jones Soda's stock price to become artificially inflated, inflicting damages on investors. Jones Soda Co. engages in the development, production, marketing and distribution of beverages primarily in the United States and Canada. Its products include Jones Pure Cane Soda, Jones Organics, and Jones Energy, among others. The Complaint alleges that during the Class Period defendants issued positive statements touting distribution and production agreements with numerous major retailers. Defendants stated that each of these agreements was cemented and that the Company was poised to reap financial benefits. These statements further led the market to believe that major retailers had stocked the Company's sodas on their shelves for sale, or that the sodas would be stocked on these retailers' shelves.
Then, on August 3, 2007, the Company announced that earnings for the quarter ended June 30, 2007 were well below Wall Street's expectations, and that the Company's canned products were not on enough store shelves in time for the peak summer season sales, which began during the Memorial Day weekend. As a result of this news, the price of Jones Soda stock plummeted nearly 23 percent in after-hours trading to $11.70 a share.
Links to this post: