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Does Missed Coupon Mean Company Will Go Dark?
We think China Medical Technologies (CMED) is an attractive short at current levels, and that its missed interest payment supports Glaucus Research’s report arguing that CMED’s equity will end up being worthless. Most ominously, CMED’s non-payment may indicate that the company is no longer interested in meeting its obligations to foreign shareholders and is preparing to go dark, following in the footsteps of many other troubled U.S.-listed Chinese companies whose management teams simply disappeared into the sunset after fraud was discovered at their companies. China Medical’s payment default was made public last week, when Fitch Ratings announced that China Medical Technologies had missed the coupon payment on its $125 million 6.25% convertible senior notes due 2016, and it downgraded the company’s rating to "Restricted Default." Standard & Poor’s has subsequently downgraded the company to "SD", which indicates that a company has selectively defaulted on some obligations. As of yesterday, both ... … Read entire article »
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Hire Hopes for Job Seekers With Dodgy…
With the nation’s unemployment remaining stubbornly high, a number of states are taking a step to help job seekers: banning credit checks. This month, California became the seventh state to prohibit companies from doing credit checks on many applicants, and similar bills are pending in another 19 states. On the federal level, a bill that calls for a similar ban is awaiting review by a House subcommittee. The moves could be “a game changer for people negatively affected by this economy,” says Persis Yu, staff attorney at the National Consumer Law Center. The trend also has ramifications for employers, who for years have been permitted to review the credit histories of prospective workers. The assumption, experts say, is that a bad credit report might help flag poor work habits and decision-making, and even general untrustworthiness. Indeed, some 60% of employers report doing credit checks for some or all job candidates, according to ... … Read entire article »
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