Focus Media Shares Jumped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of battleground stock Focus Media (Nasdaq: FMCN  ) have jumped by upward of 11% on optimism for earnings that are due out any day now.

So what: The company has not confirmed an official earnings announcement, but it may come as soon as Monday. Late last year, shares were crushed by fraud allegations from famous short-seller Muddy Waters. Investors are clearly hoping that the results will put the fears to rest. The timing of the initial Muddy Waters attack was a little suspect, just a couple of days after Focus Media reported third-quarter results, so the next release would be months away.

Now what: The company has still been actively defending itself as best it can in the meantime, recently announcing a new dividend policy to inspire confidence in its cash flow. Chairman and CEO Jason Jiang even personally purchased $11 million in shares after the attack. Muddy Waters' claims have attracted the short-sellers, with 10.8 million shares held short as of this month, or about 8.3% of shares outstanding. Part of today's move could be shorts scrambling to cover in case the company's earnings come out strong.

Interested in more info on Focus Media? Add it to your watchlist by clicking here.

Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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