Muddy Waters is out today with its latest on one of its recommended Chinese shorts:
Focus Media Holding Ltd. (FMCN, Financial)'s bizarre acquisition of a ginseng plantation at the Russian and North Korean border illustrates that FMCN's acquisitions are not kosher. The most troubling aspect of this acquisition is that the selling shareholders, who had purchased the plantation only five months earlier from the founders, included at least one FMCN employee. Strangely, this company seems to have no operations; yet, most recently reported a net profit margin of 48.9% on $1.5 million in revenue.
We therefore wonder what purpose the ginseng plantation entity serves, and whether there are ongoing improprieties associated with it.
MW_FMCN_GinsengPlantation_010612
Focus Media Holding Ltd. (FMCN, Financial)'s bizarre acquisition of a ginseng plantation at the Russian and North Korean border illustrates that FMCN's acquisitions are not kosher. The most troubling aspect of this acquisition is that the selling shareholders, who had purchased the plantation only five months earlier from the founders, included at least one FMCN employee. Strangely, this company seems to have no operations; yet, most recently reported a net profit margin of 48.9% on $1.5 million in revenue.
We therefore wonder what purpose the ginseng plantation entity serves, and whether there are ongoing improprieties associated with it.
MW_FMCN_GinsengPlantation_010612
