Prescience Point Report Claims Celadon Group Is Worthless

Celedon Group Inc. CGI shares fell more than 10 percent Wednesday after Prescience Point Research Group didn’t pull any punches in a new bearish note.

According to Prescience Point, more than 95 percent of Celedon’s reported tangible book value doesn't exist and the company is essentially worthless.

“CGI has used off-balance sheet entities (i.e. 19th Capital, JV with Element) and manipulative accounting practices to hide its insolvent condition from investors and creditors,” Prescience Point claims in the report.

After identifying what the firm alleges are inconsistencies in Celedon’s public financial filings, Prescience Point hired a third party forensic accounting firm too look into the company. According to the new 35-page report, Prescience Point now believes Celedon deceived shareholders and inflated its tangible book value by 71 percent.

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In addition, Prescience Point claims Celedon used a sham Daylight Loan with a JV partner, questionable auditing practices and an inflated 19th Capital shareholder redemption to inflate its perceived book value.

“We hope that current and future investors and creditors familiarize themselves with the risks we have addressed and take immediate action to preserve the value of their holdings,” Prescience Point concludes. “We also hope that the NYSE, regulatory and law enforcement agencies and CGI’s auditor take necessary precautions in protecting investors.”

Prescience Point has a $0 price target for Celedon stock.