If I were Chairman Zhong Bo, and if I knew that ZSTN's financial statements were accurate, I would take ZSTN private in a heartbeat. Do the math. There are 11.7 million shares outstanding. Zhong Bo owns just under 5.1 million shares. That leaves 6.6 million shares that he doesn't own. At today's closing price of $1.81, the shares he doesn't own are worth $12 million. At 6/30/11, the company had $50 million in cash, no debt, and positive cash flow adding to the cash pile at a rate of about $2 million per month.
The CEO could make a generous cash tender offer of, say, $3.00 per public share. At such a large premium to market, he could probably get all the shares. (Anyone reluctant to sell, facing the prospect of becoming a tiny minority shareholder in a private company, would likely give in and sell.)
That would require $20 million cash. He should be able to borrow $20 million from a bank, or an investment bank, or a hedge fund or institutional investor. Heck, even if he had to get the money from a loan shark, it wouldn't matter. As soon as he owns 100% of the company, the company declares a $20 million dividend, and he uses that cash to pay off the loan.
Now he owns 100% of a company that has $30 million in cash, (call it $25 million after paying fees to the lender and taxes) and still no debt. And now the cash flow is even more than it was before, because all the expense of being a public company is gone.
Like I said, I would do it in a heartbeat if I was Zhong Bo and if I knew that the financials were true.
The CEO of AMCF put in a "plan" to buy a quarter of the stock trading on the open market:
Who knows if he is just scamming or not. The stock ran up before the news and then sold off as soon as it was announced. Maybe he and his buddies just bought @ $1.20 - ran the stock up - made the announcement - and then dumped @$1.90.
Let's see if he actually follows through; or if like so many others - he buys only a few token shares.
With so many of these Chinese micro-caps ... the big question is why aren't they buying back as many shares as they can?
They can't make any other investment that will give them a 500% return on their money can they?
Remember when Ken Lewis and the other insiders stared buying BAC shares like crazy in 2009?
I knew that was the bottom and bought financials myself. Wow did that pay off!
The Chinese CEOs have the money. The time to buy is when they do. If they don't believe in their own rosy projections - why should we?
I am waiting not for buy announcements, since they so far at least have been mere propaganda - instead I want to see huge actual buying. I want to see the WALK and not just the TALK!
ZSTN IPOed at 8 and is valued at 14.
No way it will be bought out at 3.
We're probably in a bear market right now,
which is why every Chinese stock is undervalued.
At some point the CEO will buy more shares.
The bull market will return and ZSTN will sky rocket...
and dumb American investors will buy ZSTN at prices in excess of 14.
Might be a few years, however.
Thank you Edison for your vote of confidence.
The CEO is a smart man but he cant control prices in the marketplace.
How can he prevent fools from selling off stock in good companies?
He owns around 49% and based upon Chinese laws, he might not be able to buy more unless ZSTN goes private.
I hope the company itself will complete their current stock buyback and put another in place.
The lower the stock, the scam looks more obvious each passing day.
They did a terrible job to tell a lie. The Balance sheet looks too good, they did not expect the stock could trade this low.
Now, how could they explain the strong balance sheet and no action from the company?