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Xinyuan Real Estate Co., Ltd. Message Board

  • teknowiz teknowiz May 16, 2013 7:33 AM Flag

    Management's total inaction on share price is costing them tens of millions

    If management would have taken right steps to increase shareholder value in the last 2 years, XIN's share price would be at least around book value of around 10 today (the fair value is 20 but lets give 50% Chinese discount)

    They could have done a secondary offering for 20 million shares at 10 instead of recent expensive bond offering. That would have done 3 things

    1. Saved company 26 million dollars per year of interest
    2. Increased liquidity of shares and increased profile of the company in stock market
    3. Opened a channel for company to raise inexpensive capital in future

    Not to mention, the entire management team that have options ranging from 100K to 1 million would be many millions richer today.

    I am totally awestruck how they continue to ignore ridicuously undervalued stock, when they could spend 30-40 million to right price the stock in the market and recouped many times in saved interest and capital gains.


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