The number one issue the article raises in my mind is the price Yong is charging for its product vs the competition.
I am not sure if the author is credible here and I have done no research on my own. But if indeed Yong is charging 10X what the generic version of the product goes for, we would be in trouble. I don't believe Morgan Stanley would have made an investment if this were the case.
guru: That is correct. Mr. Sun, a corrupt employee, has caused millions of losses to Morgan Stanley and its clients. Mr. Sun know perfectly well that Yongye is a complete fraud and that Morgan Stanley is going to lose its entire investment. He did it for the trophies:
Yes as it is an old short argument, just read the FQA that mav4togo suggested you to read, it is a good starting point.
Fulvic acid is extrated from humic acid so comparing the price of the two is like comparing the price of iron ore versus the price of steel. In addition if they would sell the product at 10 times its competitors' price why would their gross margin be "only" 58%, it should have been closer to 90% but who would buy it.
Again I think this is an old argument that shorts have been able to recycle again and again but the topic is a waste of our time as those numbers have been audited by KPMG and reviewed by MS and it should be put to rest.
ne: Do you know what Yongye's product contains? 20% NPK, 10% microelements, and 5% humic acid, and the rest is water. A generic 100ml bottle of it would sell for $0.02 (not an error in he decimal sign!). Yongye claims that there are demented farmers who would pay $2.50 for a bottle. So, in fact, Yongye's product is more than 100x as expensive as the generic version.
And don't start me on Yongye's "animal" product!
x.r. your numbers are BS without a link verifying that. Go to a store near you and you will see fulvic and humic acid fertlizers are far far more expensive than you are claiming, at least in the US
lcd: Morgan Stanley has not conducted any due diligence on Yongye. That is why they have lost millions already and will lose THEIR ENTIRE investment in Yongye, as Yongye is a complete fraud.
Suggest to read the answer to question 20 as a start
Firstly, the challenge with this type of statement made by the author in MF is comparing apples to apples and I dont think he is.
Secondly, the fact is you can always find cheaper brands than Miracle Grow but Miracle Grow is still the market leader. In other words, just because something costs more doesn't necessarily make it a problem. A product has to work, be easy to use and cost effective (meaning you get bang for your buck) after that its all about sales and marketing.