Calm Down, Calm Down and avoid the Hysterical Laughter...
That was a note to myself.
I honestly can't believe somebody shorted this stock in after hours. Anything could happen in the short term, but if you encounter such dumb luck where you get a chance to escape with a profit on a short initiated after this earnings report, don't be dumb enough to believe you made a good trade. It's an awful trade, pure and simple. Only luck can save you now.
25 million in revenues, 100% sequential growth.
I heard two arguments in an attempt to try and douse the raging fire which is JRJC's growth.
1. The profit was only recognized this quarter because of one-time non-recurring deal (which a bearish twits on twitter called non-reoccurring - ie - we saw the counterparty and he is naked and mentally diseased). OK. You want to do real accounting as it effects the company, add back share-based expenses which are not cash and already paid for and calcuated internally by anybody with a brain - or investing experience. (and btw are accounted for in the market cap you all look at in the 23,000,000 share count). Real earnings was likely higher than 1.6 million.
Also if net investing was as easy as multiplying 1.6 million * 4 quarters a year * a 20 PE, the market would be dominated by 3rd graders. We'd have no chance. Ugh, the market is rising and the amateurs are back, it's as frustrating as it is rewarding and profitable.
The story is revenue growth.
2. JRJC only increased their revenue by... ahem... 400% because they advertised their way to get there. No cowpie, Sherlock! I thought you could just create a new service, and people would smell it through their Wi-Fi connection. After all, don't people sign up for new gold trading and banking services much like they buy pizza in an airport? They just walk in and throw their money on the table to satisfy their immediate needs. No need to advertise, right? Not like you need a subscriber base to retain. Advertising expenses are not meat to accelerate forever. Do we got it?
I didn't stop doing research and found some reason to be cautious a few moments ago.
Word on xueqiu according to one poster on a chinese stock message board, is that precious metals business isn't going to be that great in Q2. Apparently Chinese bidders bid up the price yesterday knowing that 2nd quarter will be worse and they are bailing now.
The volume is so huge that any serious investor has to consider that somebody in the know is trading this seemingly good earnings report. This volume doesn't easily lie. I'm gone until I have some reason to get back in.
Sorry for being an arrogant fool.
I hope you guys can make money on this, but I've gotta bail to protect my now measly profits which I assume will soon vanish should I continue to hold.