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LJ International, AŞ Message Board

  • revthomashall revthomashall Mar 1, 2013 1:31 PM Flag

    Question on my wishful thinking

    Granted responses here will be opinions. Am I simply doing wishful thinking for a price higher than $2? That is the given buyout. Yes, it did trade above 2 for a short time. Came back down quickly. Dark gives book value at $3.87 or so; Volume here is drying up, institutions holding, little buying, or selling. Still looking, researching for stock to take this place, so to make up the loss here. So, am I simply doing pie in the sky wishful thinking for anything above $2? Thanks

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    • The offer to go private might have been made as a plan to support the price of the stock near the $2 level. With the deemed dividend accrual and the increased cost incurred by the company to expand and beef up accounting, along with what LJ claims is a softening of the jewelry market, there was no bottom to the stock price. Showing a loss of $.50 a share for the TTM, and with no news, the price of the stock could have gone to $.50. There is no doubt in my mind, that if they wanted to pull off a purchase at or near the $2 price, they could do it, but for Yu Zhen, who if not in Kahootz with Fountain Vest, would fight a buyout at that price. Yu Zhen filed a ownership form with the SEC and in it, made a statement that the $2 buyout was an inadequate offer and was reserving potential legal action and holding off on any action until the board moved forward. I believe that but for the Fountain Vest Financing LJ stock would be over $4. So to answer your question, Yes, I do believe that there is some hope that we long term investors will see more than $2 a share for our long term loyalty. beels