Universal Travel Plunging On Earnings Report Delay (UTA)

Universal Travel UTA dropped over 20% today after the company said it would delay its 2010 earnings report to a later date in 2011. The company is a reverse merger stock, which is a group of stocks that has been under intense scrutiny for their disclosure procedures and accounting irregularities. Many similar companies have seen their stocks crater when allegations of fraud have surfaced, so investors are shooting first and asking questions later. Chinese reverse merger stocks usually trade at severely discounted price/earnings ratios because investors lack confidence in their financial statements.