Originally Posted by
Balance
On a very serious note, reading through all the postings in the last 3 days, I believe imo that there are several pertinent observations I would make about the downgrade announcement yesterday:
1. Directors and management obviously do not have a good handle of what's happening with sales & stocks in the market - been too easy in the last few years with demand exceeding supply. Management information system is deficient and frontline staff have been asleep on the job.
This is a very serious problem & issue for a company which is attempting to go global. The fact that we have had 2 shocking downgrades within the space of 3 months is testimony to that fact.
2. Daigou sales are very significant (hundreds of millions of dollars) and ATM is extremely vulnerable to any disruption to that sales channel. With the stroke of a pen, the China government can wipe out that channel.
3. Related to 1 and 2, have there been channel & brand switch? So the decline in sales is really the cannibalization of sales from daigou channel to the direct sales channels in China? This could explain why sales growth to China are now going backwards overall.
4. Management selling in the quantum and the timing begs the question if there has been skulduggery in the way they presented sales forecasts in the last 3 months. Revert back to 1 above if there is no skulduggery. Either way, there is a very serious issue which the company needs to come clean on.
I would certainly stay clear of investing in ATM until answers are forthcoming on the above points.