{ "docId": "019dd923-622c-750b-8b95-e976ef3dfa16", "docSlug": "7f8b05d541c7", "documentTitle": "Focus Media Holding Ltd. (FMCN)", "authorId": "51_Muddy_Waters", "authorName": "Carson C. Block", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2011-11-21 00:00:00", "orientation": "portrait", "aspectRatio": 0.7070758, "pageNumber": 3, "pageCount": 80, "prevPage": 2, "nextPage": 4, "slideType": "villain_critique", "function": "name_villain", "density": "overcrowded", "nDataPoints": 6, "notes": "This is a page from a Muddy Waters research report exposing corporate malfeasance.", "elementsJson": [ "bullet_list", "paragraph", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b95-e976ef3dfa16/3", "deckHref": "/decks/019dd923-622c-750b-8b95-e976ef3dfa16", "deckJsonHref": "/decks/019dd923-622c-750b-8b95-e976ef3dfa16.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b95-e976ef3dfa16#slide-3", "components": [ { "bbox": null, "kind": "callout", "text": "Muddy Waters believes that many of the items we discuss in this report are symptomatic of a highly troubled enterprise that is run solely for the benefit of insiders.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-14d7-73fd-9f5a-561a197571d2", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.66, "x": 0.17, "y": 0.595 }, "kind": "list", "text": "FMCN's board is incapable of exercising good corporate governance.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2620b9a9-222a-496f-a056-c1bb3b5d16d3", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.66, "x": 0.17, "y": 0.36 }, "kind": "list", "text": "FMCN took a rare winner and sold it for a loss to its joint venture partner.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "286d4a47-673d-4a5b-be73-b83d3af04916", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.66, "x": 0.17, "y": 0.49 }, "kind": "list", "text": "FMCN insiders have maneuvered themselves to the front of the line to cash in on the expected IPO of one of FMCN's subsidiaries.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "59170668-9925-4158-b850-64ef6a8013d5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.66, "x": 0.17, "y": 0.235 }, "kind": "list", "text": "Insiders have used FMCN as their counterparty in trading in and out of FMCN subsidiary Allyes, with several individuals earning a total of at least $70.1 million, while shareholders lost $159.6 million.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "cb6ccbf6-c4f9-4cf0-8b7e-e78d5a6be422", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.66, "x": 0.17, "y": 0.305 }, "kind": "list", "text": "Sales of FMCN shares by insiders have netted them at least $1.7 billion since FMCN went public in 2005.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f0508c47-f0b2-4ca7-845b-965eef479c56", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.66, "x": 0.17, "y": 0.12 }, "kind": "list", "text": "FMCN has written at least 21 acquisitions down to zero and then given them away for no consideration.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f666b3dd-35a4-4260-ba3c-3df43e8f0808", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.66, "x": 0.17, "y": 0.67 }, "kind": "paragraph", "text": "Muddy Waters believes that many of the items we discuss in this report are symptomatic of a highly troubled enterprise that is run solely for the benefit of insiders.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f93935be-c426-41ae-b382-f8be6fe74f80", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.66, "x": 0.17, "y": 0.89 }, "kind": "source-note", "text": "Cost to shareholders calculated as $225.0 million in initial consideration plus $71.9 million in earn-out, minus the $124.0 million sale price to Silver Lake and $13.3 million sale price to management.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "24667f2c-1387-4505-a1bf-a63091bcc46b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.66, "x": 0.17, "y": 0.83 }, "kind": "source-note", "text": "Calculated as the difference between Management's purchase price ($13.3 million) and their sale price ($76.0 million based on a full sale to Silver Lake at a $200.0 million implied valuation) combined with proceeds to FMCN insiders from the original sale of Allyes to FMCN of at 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