Kevin Chen, CFA, MBA said... BTW, if you haven’t noticed, there are quite some Chinese investors in the list of the holders of options issued 2009. These are not American Joe retail investors as falsely claimed by the poster in Seeking Alpha. These are probably rich and powerful people in China who first-hand knowledge on every thing going on in Taiyuan and know exactly what they are paying $2.25 per share for. Also contrary to what those irresponsible posters said, these are not newly issued options but old options issued in 2009 that were changed from cashless exercising to for cash exercising only by the company. The change from cashless exercising to for cash exercising actually is more fair to current shareholders because these option holders actually need to pay $2.25 per share to current shareholders (to the company which indirectly is to current shareholders) and make the exercising decision harder for them because they have real cash cost of $2.25! In other words, these option holders are not selling at $2.25 when they exercise the option; they are BUYING at $2.25 to have a chance to SELL LATER at higher prices, just like all other investors do.
Many of these option holders did exercise their options and paid $2.25 over the past two quarters. It is naïve to think that none of these rich and powerful investors in China know what they are paying $2.25 for. This is another clear logic that few American investors are seeing and pointing to the nose of shorts and bashers. I bet not many people can even imagine the consequence Cai and Xue will face if they are dare to fool these investors in China. Compare to the bullets they would be getting, SEC inquiry is nothing!
That’s one of the reason that I think that it is very possible some big Chinese investors are secretly accumulating shares at current price without letting anybody noticed (including shorts). It’s simple: if $2.25 is a good deal $2 is an even better deal!
Also in the contrary to what the misleading information the poster in Seeking Alpha and some irresponsible commentators made, the management team has said in conference call that the company does not intend to issue any new shares at then current price (close to $3 if memory serves me right), letting alone at $2 or lower. So, all the talk about issuing new shares at current low price is only the imagination from those purposeful critics.
One last thing: I’d suggest that people examine claims made by amateur commentators on any discussion board or investment portals. Judging by his tones in his posting and the way he cites all kinds of baseless allegations from shorts in his one after another comments to his own posts, he looks every bit like a short or a person who wants the price to go down than a long to me. Yup he might own 5 shares of LPH, but how much he is getting paid by shorts or by big investors who want to accumulate shares as cheap as possible now? Or, how about if he himself is thinking about buying 100K more shares at lower prices? The cost of 5 shares of LPH to claim himself as a long looks dirt cheap to me compared to the real profit he is thinking about.
It looks more and more like: the management is not the one who is really deceptive and sly. The bashers on LPH are, and many retail investors are still being fooled by them. At this point, I’d say let them do their thing. There is not much point in rushing to rebuff every thing they throw out. They’ll pay a very painful price pretty soon. No need to give them a heads-up.
Lupisv, you've gotta read the rest of it. Go to the link above. This Kevin Chen is a real CFA, with all the right connections - the real deal. This is as good an explanation to my question of "who is selling" as any I have heard yet. "Wash trades". I am learning more every day about the tricks going on behind the scenes, and believe me, this is as logical as it gets.