Unfortunately, we are going to have to suffer in the short-term because EFUT wants their options cheap.
2010-2011 will be interesting to watch, as I believe 2009 numbers (which I believe will beat the revised guidance) will be nice comparisons and make the quarterlies look pretty damn good in terms of yoy improvements.
If EFUT can't turn the company around and start earning something from their investments by the end of 2011, I will consider selling.
However, at this price I wouldn't even think of it. Opposed to what many on this board are saying, EFUT, despite it's aggressive spending, is going to earn money this year - unless things go horribly wrong in 4Q. They are not bleeding cash for the year, as you will see at the end of 4Q when cash levels go back to 7-9 million.
I'll be very interested to see how EFUT will perform after they issue themselves options. Unfortunately, I don't think it was ever in their plan to make US based shareholders rich - but to use this company to become rich via US based shareholders.
Thanks to them, they are going to be able to buy pieces of their own company for fractions of the long-term value. Very nicely executed by EFUT management; but what I feel is a very unfair raping of impatient US-based holders of their stock.
I'm not worried about this company being real or not, it is obviously real. There are articles written about them all the time, and they often attend industry events/trade shows marketing their products. It's clearly not smoke and mirrors. It's a real company.
I'm in Nepal right now and may hop over the border. They invited me to visit their headquarters if I was in China last time I called.
Over the long-term 2009 first 3 quarters of performance should be a blip. Only time will tell, but I know where I'm placing my bets.
First, Efuture's 2008 annual report of SEC filing indicated that: "We are a Cayman Islands exempt company, and our corporate affairs are governed by our Memorandum and Articles of Association and by the Cayman Islands Companies Law (2007 Revision) and other applicable Cayman Islands laws. Certain of our directors and officers reside outside of the United States. In addition, the Company’s assets are located outside the United States. As a result, it may be difficult or impossible to effect service of process within the United States upon our directors or officers and our subsidiaries, or enforce against any of them court judgments obtained in United States courts, including judgments relating to United States federal securities laws. In addition, there is uncertainty as to whether the courts of the Cayman Islands and of other offshore jurisdictions would recognize or enforce judgments of United States courts obtained against us predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in the Cayman Islands or other offshore jurisdictions predicated upon the securities laws of the United States or any state thereof. Furthermore, because the majority of our assets are located in China, it would also be extremely difficult to access those assets to satisfy an award entered against us in United States court. "
All the top executives are Chinese and live in China. There is a risk of recovering investments if financial figures are manipulated.
Second, why did they pay such a high price to acquire Royal Stone and Proadvancer? Almost every one of Efuture's competitors in China are shocked by the high valuation to these two acquired companies.
If that is your concern, I would recommend not following foreign stocks. That particular risk, with like wording, is in the annual report and prospectus of all Chinese stocks and almost all foreign stocks traded as ADR's or ADS's. BIDU states the same thing, so what's the problem.
I'm interested in you clarifying your position that they overpaid. Perhaps you know more than I know. I thought they paid 6x income for those particular companies, which I believe is what they typically try to negotiate before they purchase.