More on Mems Restating of Its Earnings

I took some time and I reflected on what I had posted on Mems before.

My first ever blog posting was actually on Mems. http://everything27.blogspot.com/2005/10/sp-coverage-on-mems.html

And the update to that posting: http://everything27.blogspot.com/2007/03/mems-part-vi.html

These two blog postings reflected the bullish projections made by S&P on Mems.

And I did a more detailed posting on Mems here: http://everything27.blogspot.com/2005/12/mems-part-iv.html

• 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?

And last but not least http://everything27.blogspot.com/2006/03/mems-part-vi.html.In which, I made the following remarks:

• 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?

In today Star news report: http://biz.thestar.com.my/news/story.asp?file=/2007/11/28/business/19597516&sec=business

• Wednesday November 28, 2007
  
  MEMS Technology to conduct special audit on accounts
  
  PETALING JAYA: MEMS Technology Bhd's board of directors wants to conduct a special audit on its financial accounts as the company has overstated its revenue by 26.8% or RM19.7mil for the financial year ended July 31 (FY07).
  
  In a statement to Bursa Malaysia yesterday, MEMS Technology said its external auditor had expressed concerns over “certain transactions relating to revenue, property plant and equipment”.
  
  “As a result of this, the unaudited consolidated revenue for the financial year ended July 31 will be revised to RM53.7mil.
  
  This will consequently result in the unaudited net profit being reduced from RM21.47mil to RM13.45mil,” it said.
  
  Under the listing requirements of Bursa Malaysia, MEMS Technology was required to furnish the audited financial statements FY07, within four months from the close of the financial year.
  
  The company said it was not able to issue its audited financial statements by this Friday's deadline.
  
  The board had resolved to appoint an independent committee comprising the company's independent directors to consider the matters highlighted by the external auditors, including the mandate to appoint a professional firm to carry out a special audit.
  
  “The professional firm will report directly to the independent committee, comprising Zakaria Merican Osman Merican, Datuk Dr Mohamed Ariffin Aton, Dr Aziuddin Ahmad and Norazharuddin Abu Talib,” the company said in the statement.
  
  MEMS Technology was in the midst of applying for a transfer to the Bursa Malaysia main board.
  
  Part of the transfer requirements is to have an uninterrupted cumulative audited profit of at least RM30mil over three to five years and a minimum audited net profit of RM8mil for the most recent financial year.

How? What do you think of Mems overstating of its earnings?

And here is how Mems had traded for the past 6 months.