Shares of Focus Media Holding Limited (NASDAQ:FMCN) are trading up 10% in pre-market trading. The company announced that it had filed its previously delayed annual report on Form 20-F together with the audited financial statements for the year ended December 31, 2006. It has also announced that its audit committee has completed its previously disclosed investigation into allegations made by U.S. Counsel to an investor described as holding a short position in Focus Media stock and concluded that nothing has come to its attention, apart from the initial allegations that gave rise to the investigation, that would cause the audit committee to believe that Focus Media made undisclosed rebate payments to a third party advertising agency through another advertising agency, namely, Everease.
The Company has informed investigators that it has concluded that Everease is a related party based upon information developed during the investigation and the audit committee concurs with the company’s conclusion that Everease should be deemed a related party.
As a reminder, this is the one that is the electronic billboard and advertising play in China, and the 2008 Olympics are believed to be a large boost for the company. As of March 31, 2007, Focus Media had approximately 90,000 display units in its commercial location network, 40,700 display units in its in-store network, 124,500 advertising poster frames installed throughout China and 200 outdoor LED displays in Shanghai.
Shares closed yesterday at $48.50, but shares are up over 10% at $53.60 so far this morning. If this holds it will be a new high, with the 52-week trading range being $26.05 to $53.29.
Jon C. Ogg
September 25, 2007