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Avid continues …
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Since they have not done any financial reporting, their stocks will become a pink sheet company, so the symbol would be postfixed with “.pk” They even drop below the OTC BB, which is a Nasdaq trading firm as well. However, the majority owner of the stock owns the company.
Since they did not declare bankruptcy and they are debt free and still liquid, no creditor exists that can force them into Bankruptcy. Their agreement with Nasdaq was that they would continue timely filings of their 10Qs, quarterly filings. However they failed to do even this simple act. Remember, 10Qs are not audited, so they are not expected to be perfect. The 10K however is, but they were given freedom to stay listed by filing 10Qs until they repaired their accounts.
I’m still doing my due diligence, but some initial theories are:
1. the senior Exec team is involved in a financial scandal, with potential criminal implications.
2. they are hoping to delist to help cover disclosures that can be used against them
3. they are hoping to go private by driving down the price of the stock. The pink sheets are penny stock investors, their current price is too high for them. So the stock would become largely illiquid and prone to huge swings, particularly downward. They can then get additional outside funding and issue a ton of stock to “friendly” investors, who would then use their majority to take the company private. And they can keep putting the profits in their own pockets without anyone watching.It’s not pretty no matter how you look at it.
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There’s an awful lot of speculation on this thread – and some pretty nasty insinuations – without the slightest shred of evidence. Pure, wild speculation.
– Oliver
Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com -
[Oliver Peters] “But why do you care?”
Not only a former Avid editor for more than a decade but also trainer and engineer at Avid facilities for a time.I feel they’re going to send their users into a lot of turmoil in the next couple of years and I suspect we’re all going to be impacted by that fallout.
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[Craig Seeman] “Not only a former Avid editor for more than a decade but also trainer and engineer at Avid facilities for a time.
“Given that, “die, die” seems to be an strange sentiment.
[Craig Seeman] “I feel they’re going to send their users into a lot of turmoil “
I don’t agree, although I see how that could be possible.
– Oliver
Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com -
They didn’t file their 10Qs and they already admit to having to restate years worth of AUDITED financial statements, we’re talking the 10Ks. That means that an Auditor is involved as well. The executives have to sign off on these statements and take personal responsibility. It’s not a minor quickbooks mistake. It’s a really serious problem for them, their shareholders and their stakeholders. Their stakeholders are all owners of Avid software, services and hardware.
During this period of uncertainty, there is a danger of a flight of talent to their competitors. Without debt, there is no chance to force a bankruptcy in order to get a trustee in there to protect the assets. This is too well orchestrated for my comfort. Definitely the hands of well paid lawyers can be seen in their current strategy. And, those lawyers are working for the executive bench; shareholders and stakeholders be damned.
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Actually in lieu of “less wild” speculation, it seem like very realistic speculation.
I’m not as included to think there’s so much duplicity as much as “CYA” going on.but
[Jack Zahran] “They can then get additional outside funding and issue a ton of stock to “friendly” investors, who would then use their majority to take the company private.”
this seems reasonable.
Given how long this has been going on (closing in on a year at least), this is not likely to be a minor “oopsy” accounting issue. Either there’s a serious problem or there’s a calculated tactic.
I don’t believe professional accountants and auditors would take this long unless the issue was major and no company would normally want it to take this long (unless maybe they have a motive).
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[Oliver Peters] “Given that, “die, die” seems to be an strange sentiment.”
Humorous response to Aindreas.
think Jack is close to the truth and I’m not even implying that sinister a motive. I do think what they’re doing is calculated. I can’t honestly see otherwise.
[Oliver Peters] “I don’t agree, although I see how that could be possible.”
Whenever there’s a sale, depending on who the buyers are, they’re going to be a lot of concerns. Whether investors or outright sale, there’s going to have to be a major change in their business model and I can’t help but think it’s going to hurt their current customers and I don’t mean Media Composer users in that regard either as it’s not their major source of income.
Avid’s hardware, service contracts, customer base is obviously extremely valuable… yet under Avid’s current business model, not profitable. There’s no magic “sell more” button for them that will turn this ship around.
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[Jack Zahran] “It’s not a minor quickbooks mistake. It’s a really serious problem for them, their shareholders and their stakeholders”
The documents pretty clearly state that the cause is the calculation of income from updates. This requires a recalculation of several years worth of balance sheets. Not a small matter.
[Jack Zahran] “During this period of uncertainty, there is a danger of a flight of talent to their competitors.”
I doubt there is any more flight than caused by the normal competition from Avid, Adobe, Harmonic, Quantel, Chryon, etc.
– Oliver
Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com -
[Craig Seeman] “Whenever there’s a sale, depending on who the buyers are, they’re going to be a lot of concerns. Whether investors or outright sale, there’s going to have to be a major change in their business model and I can’t help but think it’s going to hurt their current customers and I don’t mean Media Composer users in that regard either as it’s not their major source of income.”
Could all be true. Too early to tell. I would add that there is just about no company that we deal with, which is exclusively in the film/broadcast/TV business, that is a public company. Avid is just about the only one. Every other company (Apple, Adobe, Sony, Panasonic, etc.) that is a publicly-traded company is not dependent on us. Other companies (Grass Valley, Quantel, RED, etc.) are either private or owned by private investment groups. Clearly a tough position to be in.
– Oliver
Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com -
“The documents pretty clearly state that the cause is the calculation of income from updates. This requires a recalculation of several years worth of balance sheets. Not a small matter.”
So why didn’t they at least keep up with their 10Qs? It belies a more serious problem, it raises the suspicion that “recalculation” was a cover to hide something worse. It doesn’t take a year to put update income into a spreadsheet and apply a different schedule to them.
Did the publish the Auditors report on the problem?
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