Monday, January 11, 2010

Jarden Chocolate Covered Disclosure

Jarden (JAH) sent market signals that made its stock jump. Less than two weeks after their year end they are reporting unaudited numbers and cash positions while at the same time reporting a bond deal that should term out some liabilities that are coming due shortly. They make a big deal of saying audited results will be announced Feb 18 with an investor day Mar 10 at the NYSE. So to sell the bond deal they are announcing chocolate covered financial results so that everyone gets that warm fuzzy feeling.

Management is sticking their neck out. The numbers are not yet audited so what of the role of the auditor to protect shareholders? The cart is in front of the horse when it comes to governance. Did the bond investors really need this extra assurance which was delivered in a dented compliance package? If management felt it need the buzz how weak was the deal in the first place. Debt markets are never wrong. There is risk here.