Titan filed an 8k today that had more, slightly distressing news. However, as I wrote over the weekend, this bad news is probably already fully priced into the stock.
They gave more information about the massive write downs the company took in its Q1 numbers for impairment of business. It’s simply amazing to me how rapidly a company can sabotage its own success through blunders.
I don’t know exactly how it all happened, but apparently they have closed down the entire telecom division, and plan to reopen it at a point in the future.
According to the filing, they stopped paying the distributors. The filing does not make it clear as to why or what happened, but nevertheless, there you have it.
As a result, they took some major impairment charges- while these were non-cash, the fact is they don’t have a functioning telecom business at this time, and therefore have given up about $30 million in formerly quarterly profitable business. It must have been some mess, and continues to be one.
They allude to a restart of the business with a major telecom company providing the minutes- who knows where that is going. However, it seems like someone might want this business if there is still indeed any business to be had.
On a further distressing note, the 8K disclosed the company received notice it would be delisted from the Bulletin Board as they have now been delinquent in the financial filings 3 times in the past two years.
The haven’t lost their listing yet, and the stock is still trading with an “E” on the symbol. They are going to have a hearing to make an argument that they still deserve their listing. If they lose, it is down to the obscurity of the pink sheets. Makes their former boasts about a NASDAQ listing just one big joke. They are barely hanging on to their BB listing now. It probably won’t happen for a month or so.
Last piece of news- Titan also disclosed it is suing the formers owners and management for USA Detergent for fraud in their disclosures related to the company’s performance. When you’re the victim of fraud it can be tough. However, this is more evidence that this management team simply isn’t capable of understanding what they are buying. I don’t believe anything of these guys are going to be recruited away by Warren Buffet’s Berkshire Hathaway in the near future.
So, now the company is Appalachian Oil- huge revenues- no profits, and this new shoe manufacturer they recently bought in Southern Cal.
The market cap is still an anemic $30 million, so all this bad news is probably already priced into the stock.
Any kind of good news break should send the stock a bit higher. I’m standing by with my fingers crossed. If you are a believer in buying when there’s blood running down the streets and no one wants to participate, this situation is tailor made for you.
I still believe it is a hold for now, pending more disclosure.