RE: RE: RE: terrior Piecing all of the information that has been dug up together, this is what I honestly think happened. This is just reading between the lines and obviously has nothing to do with internal information from the company.
The BOD and front line were probably all aware last March that their margins were beginning to thin, that new competition was in the process of cutting into their margin even further and that the outlook for the company as it stood was in trouble if they didn't take action. For a dividend player like them, there is a lot of pressure on them to maintain/grow dividends. I don't know if/whether they were worried at this point because they probably sincerely felt that this was a growth market and that they would easily be able to replace lost cash flow due to thinning margins by adding to their customer base by aggressively moving into the US to attract new clients and flood the market with their product. They probably sent the word down the line that they needed to make an aggressive push into new territory to grow their customer base as rapidly as possible. They likely made this priority number one and spent more energy on the growing the customer base than any other area of their business because they knew that cutting their margin by 75% was going to be drastic on the dividend, cash flow and share price of this company. They likely pushed hard for growth and sold and signed as many new clients as possible. When the 3Q report came out, and they BOD approved new dividends, I honestly don't think they felt the problem was going to be large as it turned out to be. Perhaps they were relieved at how much they had managed to add to the customer base in the US to pay attention to how much cash was actually coming in from them and this relief at dodging the margin bullet blinded them from seeing what was right in front of their eyes. When the market reacted by cutting their market value in half, I still don't think they realized how bad their AR problem was (Joe Kostelecky bought 1.2 million dollars worth of stock at 5.30 likely to instill confidence and likely because he thought the numbers added up).
Add another month to the problem, and they discover just how bad the AR problem truly is. Most of the new clients they pushed hard to sign to cover the decreasing margin turn out to be bad payers, they were so desperate to grow the business that they didn't vet them beforehand and voila, here we are. There are so many unknowns now with respect to the AR issue (is it still growing as even more recent accounts fall into arrears, how much of that $128 million is dead money?). Are they going to be able to cover their current obligations or will they find themselves in default with nobody willing to lend them money? Did they get so desperate that they stopped following proper accounting procedures and exposed themselves to serious fraud allegations that will lead to a halt in trading? Who knows the answer to all of these questions, I certainly don't, and I think there are probably only a handful of people in this world right now that do. If someone wants to analyze this company for future cashflow, have fun, but don't use that is guiding information for whether to purchase this stock moving forward. I agree with MensPlus, homerun or strike out here...one or the other. This play is like going to the roulette table at this point, I'm in for a bit of money...lets have some fun!