RCI management dropped another "Bombshell" on investors today, announcing that the company's auditor, BDO, has resigned. The auditors cited a lack of transparency from management and the board. I encourage investors the read the 8-K for all the details disclosed.
The company promised to release more details about the internal review next week, but given their lack of transparency with the auditors, I wouldn't expect them to be fully transparent with investors.
In the meantime, while management and the board have their hands full with the internal review, SEC investigation, and trying to find a new auditor, the underlying business continues to struggle. Bombshells posted another quarter of double-digits same store sales declines, but management continues to dump money into the declining brand.
Can someone check on the Cash Flow Kingdom's resident joker, Darren? Rather than changing his opinion and getting his clients out of the stock in the $30's after the report came out, he decided to aggressively bash me and my report. He continued to pump the stock while it cratered to the low 20's but hasn't been heard from since the announcement of the SEC investigation and the resignation of the auditor. I wonder if he still thinks my claims are made up?
"I sincerely thank the short authors for the [buying] opportunity they created." - Darren June 22, 2018 (Share price: $31.08)
Trust me, you are very welcome, Darren.
-Big Rick
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