Prescience Point believes that shares of Celadon Group (“CGI”) are grossly overvalued, failing to reflect the likelihood of an imminent debt restructuring and wipeout of existing shareholders.
In April 2017, Prescience Point issued two research papers (the “Initiation Report” and the “Follow-Up Report”) on CGI. In our Initiation Report, we concluded that CGI’s profits and TBV were highly overstated in its SEC filings and that the company was at the precipice of bankruptcy. In our Follow-Up Report, we revealed that the company was the subject of an undisclosed investigation by the SEC’s Enforcement Division.
In the prevailing 9 months since we released our reports, CGI’s auditor BKD withdrew its audits of CGI’s financial statements; CGI’s top 3 executives were replaced; CGI disclosed an active formal SEC investigation; and, CGI violated its debt covenants and would have already declared bankruptcy if not for the generosity of its lenders who have amended the credit agreement three times since May.
We believe Celadon’s runway is ending and that the equity is worthless.
