The Banking and Strategy Initiative

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Chinese Reverse Mergers: Spreadtrum and Focus Media

SPRD Nasdaq stock price history

Image by mtlin via Flickr

While fraud is endemic to China, the one to put us on alert about the nature of large scale fraud in US listed Chinese companies, Carson Block thinks it is an event (endemic fraud) is likely strong in all developing markets (huh!)

However, without commenting on the specific reason Mr Carson Block gave on why endemic fraud was found in China we need to chew on the fact that Institutional investors like Fidelity, UBS, American Century and F&C are still holding Focus Media and a half a dozen institutional investors are still on list in Spreadtrum

As per Carson Block many of these companies could be considering going private without shedding institutional investors Spreadtrum grew revenues to $184 mln and a GAAP Income of $39 mln in the latest quarter with Cash flows of $30 mln

Block runs the Muddy Waters LLC research firm and exposed SinoForest last year when it dropped 74%. These firms plan to stay out of regulatory reporting with the going private transactions. They came to be llisted on  the big board thru reverse mergers with penny companies, technically not required to publish and maintain Financial results to sell the first shares

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One comment on “Chinese Reverse Mergers: Spreadtrum and Focus Media

  1. Pingback: Chinese Media companies prefer public capital | Advantage Dealbook | The Banking and Strategy Initiative

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This entry was posted on January 12, 2012 by in Financial Markets and tagged , , , , , , , .


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