would short the stock here - they have done this before in 2010
investors were caught in disbelief as the company unexpectedly raised $40 mln despite having a giant liquidity position at an effective interest rate of 19% - stock went from $4 to to $2.50 within a few weeks
Peer China Vanke recently paid just a fraction of the interest rate for a much bigger issuance
Other cash rich Chinese companies like FMCN or SPRD just posted RMB collateral to borrow US$ cheaply so I can't see any sense in this transaction other than some kind of fraud
There is only perfect beta in this stock is the shorts. They track perfectly the performance of the stock. The stock heads to its 52 week high, a short shows up and mummers some foolish nonsense. The stock goes down and any talk about the stock is pushed aside by the my-guy-is-right politicos.
You would have to assume it's a fraud, that it's cooking the books, that it doesn't even own any of the land/properties they say they own, etc. etc. Even playing the volatility is tricky when the price has been looking for an excuse to move higher. What if you had been a short yesterday playing on the recent consolidations? That would have been a disaster. With earnings 3 days away I'd be careful. If there is any good news on Williamsburg--the shorts might be going back to their day jobs and the fickle longs will be kicking themselves. God forbid they actually start building in Williamsburg, the price would shoot through the roof......Right now it's all about that project. It is the catalyst that will send things over the top and I believe Xinyuan can do it. I believe they can pull it off.....And one last thought: Would you seriously rather go $5 to .0001 as a short than $5 to $15+ as a long? Too much potential upside to be thinking short right now really. Even if there are delays, this company will eventually find its way. It's only a matter of time.