GEO Investing

amcn cautious investingCautious investing is the latest theme surrounding recent AirMedia (AMCN) news. Yesterday, Richard Pearson of Mox Reports issued a report questioning a recent “sham” transaction that sent AMCN shares soaring in the last week. This morning AMCN issued a response in the form of a letter from the company’s CEO. The company’s response seems to agree with some of the critical points raised in Rick Pearson’s article. It seems clear that the deal has not closed yet.

AirMedia Response to Mox Reports Insufficient – Cautious Investing to All

Today’s response also leaves out further explanation, leading us to believe that the company’s counterpoints to Mox Reports are insufficient:

  • Why the company hasn’t issued guidance to U.S. investors that it had formerly issued to China A share investors
  • Any indication that it can meet this guidance only issued in China. For example, analyst estimates call for the company to report a loss of $0.54 in 2015. This estimate would include the operations of its advertising business that is up for sale. Why haven’t analysts increased their estimates on the guidance in China?
  • The fact that the actual consummation of deal is predicated on AMCN meeting this guidance upon the audit of its 2015 financials.
  • How the company would still be an unprofitable business should it sell off its entire advertising segment.
  • Why the company hadn’t noted in its original press release that the China A share company has an opportunity to back out of this deal.

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