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Xinyuan Real Estate Co., Ltd. Message Board

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  • teknowiz teknowiz Dec 6, 2012 1:37 PM Flag

    SEC Investigation, Ernst & Young, XIN, Etc.

    "They're probably ecstatic about the price drop since it enables them to buy back shares more cheaply"

    WOW. How long are they going to be ecstatic about the price drop and sorry state of its stock?

    After all, if their goal is to just buyback all shares in public hands cheaply, then why even bother about listing here?

    The reason companies go stock exchanges is to get higher valuation than their intrinsic value so then what is the point of being ecstatic about price drop?

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    • What you said regarding companies being listed on stock exchanges is true; however, Xinyuan is carrying out a buyback, so if they're confident that at some point in the future they'll be recognized as a sound, legitimate company by US investors, I doubt they're fretting much over the current low price. They're probably glad that they can buy more shares back at abnormally cheap prices for a bit longer. Then, in the future, if and when the price appreciates to a level on par with that of other developers' stock prices, XIN's book value will increase more than it otherwise would (i.e., more than if they had bought shares at a higher price).

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