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In light of the above, and after due deliberation, the Board has resolved not to recognize revenue of RM19.72 million. As a result of this, the unaudited consolidated revenue for the financial year ended 31 July 2007 will be revised to RM53.7 million. This will consequently result in the unaudited profit after tax for the financial year ended 31 July 2007 to be reduced from RM21.47 million as announced on 27 September 2007, to RM13.45 million.
Did Mems deserve the rather optimistic projections, assumptions from folks in CIMB, OSK and even S&P?
How?
For me, i believe this is a rather simple example of an overly-hyped stock which simply failed to meet their expectations. It reminds me of Warren Buffett's mumbling that when the tide resides, we will know who has been swimming naked. Well, from Mems actual reported quarterly earnings, we can clearly see the nakedness in Mems share price and of course the insane earnings projections assigned to Mems.
So curious to know... since Mems has not meet these so-called expectations... i wonder... i really wonder... did Mems failed or did the market itself failed? What do you reckon?
That's how Mems had performed since listing, which was pretty decent i think. Yes, the cash flow is a bit questionable but all in Mems is decent. (Oooh.. cash flow looking really questionable!)
Did Mems deserve the rather optimistic projections, assumptions from folks in CIMB, OSK and even S&P?
How?
For me, i believe this is a rather simple example of an overly-hyped stock which simply failed to meet their expectations. It reminds me of Warren Buffett's mumbling that when the tide resides, we will know who has been swimming naked. Well, from Mems actual reported quarterly earnings, we can clearly see the nakedness in Mems share price and of course the insane earnings projections assigned to Mems.
So curious to know... since Mems has not meet these so-called expectations... i wonder... i really wonder... did Mems failed or did the market itself failed?
What do you reckon?
How?
With a questionable cash flow and now that Mems is restating a chunk of their profits made last fiscal year... what do you think of this company?
In Mems case, yes it was not as drastic as say Megan or Transmile but over stating earnings is simply unacceptable.
Consider the following...
If Mems did not over-state their earnings, there would be no growth for 3 years!
Without the growth, MEMS would have been rather unattractive and most of all, it would never had commanded such a rosy stock price.
Just in July 2007, MEMS traded at a high of 81 sen, giving it a market valuation of 531 million. Now based on an actual earnings of 13 million, surely this 81 sen would have been an insane stock price for Mems!
Now consider this... let me flip it around....
Mems is now trading at 25 sen. Its market valuation is only some 163 million.
Ahem... consider this the other way around.. if the market valuation now is about fair for a company making only 13 million... then Mems is worth only some 163 million.
However.. due to the overstated earnings... MEMS was valued as much as some 531 million!!!
