I didn't see the McCreadie piece- but the receivables raise a big red flag
And, didn't realize until I heard all the comments on this board on the fall of PSN, that no one bought this stock based on looking at the financials at Dec 31 2011, or March or June, so I now see why financial information disclosed in the last quarter did not have a devestating effect on most posters here.
There are so many red flags in those numbers- but the biggest is that no one has paid PSN bills for nine months or more and all that IBITDA is simply accounting- not cash
Since Dec 31 2012 it seems PSN is collecting per month 10%- to 20% of its monthly bills
They set up in accounts receivable and show as income 15 million ( and IBITDA ) a month and then collect around 2 million and this goes on month after month after month.
means three things;
1- no one is paying as they don't know what they owe
2- management forgot to ask for the money and as they said a day after releasing their numbers,... it just came to their attention...... that they were only collecting 15 cents on the dollar for last nine months and will look into it and fix it
3- the billings were based on contracts- - in effect setting up revenue for months ahead- and part was simply not due
I am not sure which of the three is worse;
1- means the year end audit may reveal huge write downs trying to sort out the mess
2- means that the accounting is way over their heads - probably the best explanation as this can be fixed but write downs could easily happen at year end as accounts are just too old.
3- means that they have already recognized future rentals- meaning if things are going down hill- the next quarter will be a disaster as sales are already recognized in quarter three.
I am just speculating- I have no idea which of the three explanations is true but one of them is.
Until you can see audited numbers, buying this stock is a complete guess--just like flipping a coin - I bet all institutions have bailed as they cant own without reliable numbers-
I have gone from a very strong supporter of PSN for over a year -to feeling something isn't right
i was very lucky and bailed four weeks ago prior to seeing these numbers
I suspect there will be more to this story soon- and it wont be good