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American Oriental Bioengineering, Inc. Message Board

  • viejofarmer viejofarmer Apr 22, 2013 10:35 AM Flag

    Equity and Debt

    Shareholders should take note that the bondholders are getting a screwing and are fighting back. This company apparently feels it is OK to borrow money and not pay it back. Forget the interest, they're stealing the principal by offering about 50 cents on the dollar. So if they're willing to do that to bondholders, then take a guess what they will do to shareholders. The only thing I can't figure out is why the shares still have any value, why the stock price is not nearly zero. By the time the bondholders are done, that's about all that will be left.

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    • vonstutt May 1, 2013 10:05 AM Flag

      They still have that GD building do they not?

    • Why is the stock not at zero?? the old expression says: “Why does a dog lick its balls?” The answer; “Because it can.”

      Why is AOB management (so openly) making an effort to take the money and run? I think because they perceive they can. They believe they are outside of the US legal system and that the Chinese authorities will support that. I'm not so sure.

      Yea, it's probably stupid, though waiting to see how this ends is worth the 40 cents to me. :-)

      • 1 Reply to katherina_mkl
      • Katherine_mkl,
        I appreciate your many good postings.
        I spent several hours recently reading over the AOBI 2011 annual financial filing with the SEC (that also included news on 2012 events). I was struck with how straight-forward and factual it was as well as future oriented. It is true that AOBI is wobbling badly after being blind-sided by the Chinese governments price controls on manufactured pharmaceuticals but allowing prices on ingredients to soar. The company could be in danger of collapsing if Mr. Liu et al are unable to respond effectively. I think they are trying. I was encouraged to read that 6 non-generic products account for 59% of the revenue and AOBI has sharply reduced marketing and other expenses on generic TCM products. They are dealing with the debt. In other words, they are trying to manage their business and put the company back in shape. I didn't read anything that said that they were going to cut and run....not yet anyway.
        I have no way of knowing how venal Tony Liu is. He may be getting kick-backs etc and he may be robbing the company, but we can't know . He has a modest salary: $200K. No doubt he has great perks. BUT, he still owns 7,393,593 shares of stock. Tony and the board cumulative own 8,593,366 shares. I have to believe that Tony treasures these shares and will try to bring his company (he has preferred stock that gives him 25% voting rights and with his shares he controls 39%, so it is almost his company) back from the brink again. I say again, because this price range that we are enduring now ($.30+/- to $.80+/-) has occurred before for ten months during 2002 and 2003 after crashing from over $200 a share! Then what happened? The stock climbed to over $28 a share by 2007! Tony Liu has tasted the Big Life....his shares were worth over $200,000,000 many times over a three year period around 2007. We can only hope that Mr. Liu has some success and brings our shares back from the brink as well.

        Sentiment: Buy

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