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FMCN
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6:17 am
November 22, 2011


somrh

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Apparently over a two year period (Sept 06 to Sept 08), the company went from $499m in goodwill to $1.142b in goodwill or an increase of $643m.

Then in December 08, they wrote down their goodwill to $30.7m or a decline of about $1.111b. If there isn't fraudulant activity going on here, management is extremely incompetent.

As of Sept 08, FMCN had $2.4b in assets of which the $1.1b was goodwill or 45.8% of total assets. Oops.

Since then they've added about another $400m to the goodwill account which sits at $429m as of June '11. That represents 29% of their total assets of just under $1.5b.

12:31 pm
November 21, 2011


somrh

Member

posts 336
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Muddy Waters recently released a report:

Muddy Waters Initiating Coverage on FMCN – Strong Sell

FMCN is apparently a serial acquirer (think Tyco). However, there's a slilght twist:

there is a clear pattern of unjustifiably writing acquisitions down to zero in order to return them to the selling shareholders for zero consideration. We think of many of FMCN’s acquisitions as more of leased business arrangements, rather than full acquisitions.

This might prove to be an interesting case study. I've only skimmed through the report at this point.
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