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ZST Digital Networks, Inc. Message Board

  • hcee26 hcee26 Mar 22, 2013 11:37 AM Flag

    ZSTN - what we know

    JWB, take a look at ZSTN's 10-Q they last filed..thru 9 months 2011. They grew revenue from $88.6M to $125M and grew profit from $13.5M to $19.8M. And they last reported that Q over Q, both Rev and earnings were growing at roughly a 30% clip. I believe they also reported $55M-$56M in cash. Easily enough to buy all shares. They(Bo / Lin) own 5.8M shares leaving 5.7M outstanding. the money should be there. No reason to think a company as profitable as they were, growing at 30% Q/Q would suddenly be struggling. Going back to a TMKay post last year ( i felt he was a straight shooter) . he said he had talked with SEC and was told that the filings by ZSTN "were consistent with" a company taking itself private. (TMKay, correct if mis-stated) I'm just going off memory. you can find the tmkay post if u look for it. I'm like you, frustrated at how long it is taking, but if they were growing at 30% Q/Q, $8.21 might be a better number than ZSTN could have negotiated had they opened their books 4 quarters later.

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    • Here is the last portion of the WSJ article dated: 3/31/13:

      "Mr. Deutsch sought access to ZST's books and records in an effort to confirm the company's value. ZST said it would allow him to inspect the documents only in China. Mr. Deutsch sued for access in Delaware, where ZST is incorporated. In December, the Delaware Chancery Court ruled in his favor.

      In holding the company in contempt for ignoring that ruling, Judge Laster wrote that Mr. Deutsch's requests for a "put option" and receiver to go after ZST's assets were "exceptional." Still, he added, the shareholder provided "persuasive justifications" and ZST didn't even appear before the court to address the request.

      In court filings, Mr. Deutsch claimed ZST and other Chinese companies have "gone dark," or withdrawn from U.S. exchanges and stopped filing financial statements with the SEC, in order to depress their stock prices and help the companies go private at a much lower cost.

      In December, The Wall Street Journal reported that an increasing number of U.S.-listed companies from China had announced going-private deals.

      Mr. Graff said the trend was "a disturbing and insidious impropriety." The Delaware ruling "sets an important precedent" for other investors who have suffered losses in Chinese companies, he said. Mr. Graff said he is "confident the receiver will carry out his charge to fruition."

      The court-appointed receiver, Robert W. Seiden, is president of Confidential Security & Investigations, a forensic-investigation company in New York.

      Mr. Seiden couldn't be reached for comment.

      Sentiment: Hold

    • The float is Float: 978.78K shares. That is what is left as of 3rd qtr. 2011? Or roughly 10% of the total shares. Might be a little less now but I think it is still around 8-10%. This taken out the major shareholders shares.

      Sentiment: Hold

    • Zhong needs to issue a statement to the shareholders about what the company is doing, it been almost a year since the company issued anything. Zhong said that the company was going be transparent to the shareholders!

      Sentiment: Hold

      • 1 Reply to harry_wild
      • devilinthebluedress Apr 2, 2013 9:58 AM Flag

        I think we have a bit more information about Zhong the ding-don. This was in the WSJ yesterday. There could be some exciting changes coming (for the Chinese not so much but for shareholders yes) if Mr. Deutsch collects $32.2 million.Red rover red rover. Pull over.

        Court offers investors relief in battle with Chinese firm. A U.S. investor won an unusual remedy in his fight against a Chinese company under an accounting cloud: A judge gave a court-appointed official the power to seize company assets needed to buy back the investor’s shares for far more than their current price, the WSJ’s Michael Rapoport writes. Peter E. Deutsch began buyingZST Digital Networks shares in 2011 and eventually accumulated 3.9 million shares. But ZST ran into questions over its accounting in 2012, ultimately prompting Mr. Deutsch to sue. The judge granted a request by Mr. Deutsch for a “put option” that allows him to force ZST to buy back his shares for $8.21 apiece, or as much as $32.3 million. That per-share price is based on ZST’s book value in the last financial statements it filed with the SEC. The shares recently traded for $1.39 a share.

    • Thanks hcee26. Your comment puts things in a much more positive perspective. Let's just hope that ZSTN has provided reasonably-honest accounting. Let's also hope that the Deutsch litigation doesn't justify ZSTN remaining in the dark and not providing accurate value to their shareholders.

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