1. As of November 14th, according to the sec.gov website, the ball and chain weighing down every price movement during the past three months is now gone. Blue Ridge has sold all of its 11,000,000 or so shares of XIN, which means one very large source of downward price pressure has been eliminated. With this negative influence gone, will the company buybacks and institutional buying over the next few months be sufficient to overcome the effects of the recent "bad" quarterly report and the company's warning of a few slow months and non-inspiring quarterly reports up ahead? If anyone has new information that sheds light on this question, please share.
2. It's interesting to note that we all called Blue Ridge stupid for selling XIN, but in retrospect it looks like it was a pretty astute move. A lot of BR's selling occurred while there was upward pressure on the stock price, and BR finished selling around the time that "bad" news caused the price to tank. With their superior information and connections, I wonder to what extent BR foresaw this sequence of events. At the same time, the price has failed to appreciate too much, allowing Xinyuan to continue purchasing shares on the cheap. In short, it's a win for BR, a win for XIN, and nice kick in the face for all those shareholders who were hoping that this was the beginning of The Big Move Up. Hopefully, BR's absence from the scene, XIN's buybacks, increased institutional buying, and a potentially warming Chinese economy will enable the stock price to increase over the next few months, but at this point I personally don't have any strong intuition as to what the stock will do in the near future.
@MsCrouse, first, I tip my hat to you for correctly predicting BR was selling its entire position.
If you don't mind my asking, how did you figure that out? The only data point I had was BR's 2 million share reduction in 2Q.
Were there other things I missed? How did you know, for example, that the 2 million share sale in 2Q would lead to an 11 million share sale in 3Q, rather than, say, another 2 million share sale in 3Q, or even no additional sales at all?
Oh, so the idea that BR benefited from the recent price can be scratched. Also, the fact that the recent price dive occurred without any downward pressure from BR's selling makes me feel even less comfortable about current sentiment toward the stock. In the near term, one can only hope institutional buying, XIN's buybacks, and good economic news from China can foster some positive momentum.