(I decided that my response to all Thestreet.com anti RTO articles link would be better served as a new topic. So here it is again. )
I just spent the last two hours going over not just the direct link on the linked page, but the associated links on each article. There really wasn't anything there new to me, but it does go to show why KNDI's market cap seems to be languishing at less then $150 million while TSLA's is over $3 billion when the odds that KNDI will be a bigger company then TSLA in just a few years seems obvious.
I did just shoot off an e-mail to Cathy Cao and Ken Donenfeldt asking them to be sure that Mr. Hu gets translated access to these articles so he also knows what we are fighting.
But one point that I think is very important here. Yes, KNDI was an RTO, BUT, and this is a very big BUT, KNDI has also now filed and cleared not one but TWO SEC registrations in just the past ten months. When a Company goes public through an IPO, it goes through an even less thorough Registration process with the SEC then KNDI had to go through to get its last two stock sale registrations approved.
The procedure for registering stock is similar at the time of the initial filing but in KNDI's case, since the Company has already been filing 10K's, 10Q's etc. for over three year, the SEC has a lot more to look at before approving the followup filings.
In either case, SEC registrations are not even close to being automatic. The company files the initial registration. The SEC assigns a liaison who in turn sends the filed documents to various specialists in the Agency. They in turn go over all provided and public information. Next they send back "comments". The Company then answers the comments. Usually this back and fourth goes on for three or more rounds. Only when all at the SEC feel comfortable is the Registration allowed to "Go Effective"
In each of the suspected fraud cases, I see no direct business tie-in with any Government entity. If there was a fraud with KNDI, it would also be against the PRC and local China Governments as well. If you read all of those articles, you would have noted that in one of the fraud cases, a guilty principal of the Company is now in jail in China facing execution. I don't think Mr. HU, who is guaranteeing over $20 million of KNDI's bank debt, while only taking a $23,000 a year salary, would want to swap his silk tie for a hemp rope.
Good job forwarding to HR. It's important for all of us to understand the environment we're dealing with right now. If you're playing this stock for short term moves on the long side, you have to be prepared for possible short term serious disappointment, be it a bear raid or another secondary at some point. If you're radically margined up in size you're really playing with fire. Great promise, but it will take great and sustained execution (and better communication wouldn't hurt either) to rout the shorts. Even when things go well, they'll be back ... just look at Netflix. But that's what makes a market!
Good comments. Your analogy to NFLX is one that I often give here, but I look at the short as a great positive to NFLX. "Great promise, but it will take great and sustained execution (and better communication wouldn't hurt either) to rout the shorts. Even when things go well, they'll be back ... just look at Netflix. But that's what makes a market!"
NFLX has had the shorts in a "rolling short" trap for several years, thereby assuring a perennial high PE. Currently 68x earnings. That is exactly what I have been preaching here that we want to see happen to KNDI. It is also what kept Starbucks overvalued for some 15 years until the operationally stubbed their toe three years ago.