Trading in Fab Universal shares halted on NYSE
Trading in Fab Universal Corp. on the New York Stock Exchange was halted Friday, according to the CEO of the Oakland-based company and the stock exchange.
In an emailed statement, Fab CEO Chris Spencer responded: “It is a halt, pending news.”
He declined to answer questions, citing a shareholder lawsuit.
Fab has been targeted by short sellers who claim the company has been selling “pirated U.S. movies” and has overstated the size of its distribution network in China. A week ago, the company called the allegations “misleading and inaccurate” and said it would issue a public statement “to refute these defamatory remarks” as soon as possible.
Several lawsuits were filed on behalf of Fab shareholders and seek class-action status.
The NYSE said in a statement that Fab shares were “halted this morning before the open, for news pending. The stock will be halted until further notice.”
A news-pending halt is instituted “when a company has pending news that may affect the security's price,” according to the Securities and Exchange Commission. “By halting or delaying trading, market participants can have time to assess the impact of the news.”
When stock markets opened on Friday, the price of Fab's shares, which trade under the ticker symbol FU, remained at Thursday's closing price of $3.07, down 42 percent in the past five days.
“Trading halts under these circumstances do not typically last for too long,” said Rob Goldman, owner of Goldman Small Cap Research in Baltimore. “But if it persists, investors will be very concerned and impatient, and the consensus thought process could be that where there is smoke there is fire.”
As recently as Wednesday, Fab officials repeated denials of the allegations by short-sellers and said the company's “board of directors is working expeditiously to gather all relevant information necessary to respond.”
Last week, Jon Carnes, a short seller who operates investment firm Eos Global Holdings, made the allegations on his website AlfredLittle.com and on the popular investment website Seeking Alpha. A short seller profits from bets that a company's stock will decline.
Carnes said his fund has a “modest” short position in FAB shares, which he declined to specify.
Carnes said his allegations are based on information gathered by investigators he employed in China.
Fab's stock reached a high of $6.96 after issuing a positive earnings report on Nov. 13. Its closing high in the past 12 months was $9.70 on Sept. 25.
In its earnings report, CEO Spencer said Fab has kiosks in 40 cities across China with a total installed base of 16,820 terminals and that the company continues to add “high-quality copyrighted content” to its offerings.
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or firstname.lastname@example.org.
Add Alex Nixon to your Google+ circles.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Douglas Laboratories sells Klean Athlete, products free from banned substances
- Fracking not the problem, Ohio State scientist finds
- Microsoft to pay $2.5B for ‘Minecraft’ maker
- Mylan cuts ties with NFL star charged with child abuse
- Financial firms don’t connect with millennials, study finds
- Investors play it safe before Federal Reserve meeting
- Budweiser’s parent firm wants to buy Miller’s parent company
- Experts say economic edge at stake with R&D tax credits
- Yale, Penn State studies offer conflicting views of fracking
- Has Apple’s watch missed the party?
- Regional airlines in tough position