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Xinyuan Real Estate Co., Ltd. Message Board

  • cvdpro cvdpro Aug 28, 2013 11:36 AM Flag

    First 200 million 13.25% junk bond

    3 months later, 109 million stock sell.

    This company is running into serious cash crunch in my opinion. How?

    Sentiment: Hold

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    • TPG would not have handed over $109M without serious due diligence and discussions with XIN senior management. The way the deal is structured, TPG makes virtually nothing unless there is a substantial increase in the share price. I have to think that XIN and TPG have definitive plans on how to deploy this and other capital to increase XIN's revenues and profits.

      • 3 Replies to pliesj
      • "TPG makes virtually nothing unless there is a substantial increase in the share price."
        False. TPG is selling out their long stock, then they will short massive amounts against their "Initial
        6 Strike conversion price." Calls are Puts and Puts are Calls Curvature Trading.

      • that's not true - I don't think there's been extensive due diligence as it wouldn't make much sense. If the company is a fraud they will be able to mask this easily (remember their finances are audited every year extensively by a Top 4 firm). TPG knows that and instead of worthless paperwork decided to demand an appropriate risk premium (obviously not big enough as the stock sold off quite heavily after the deal).

      • Well, the company was supposed to very profitable since 2007, the real estate value was skyrocketing during this time. Most of the homebuilders made pretty good money during this time.

        So after so many good years, they still need to get a loan for paying 13% interest and sell a convertable bond with converting price below market(This is highly unusual). Can they get a loan with reasonable rate from the banks?

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