This is absolutely my IMHO. Before coming to this opinion I asked what is authorized shares count and got answer that it is NOW 50M!!! Remember when they made IPO it was 3M!
IMPORTANT: The Company is authorized to issue 50,000,000 Shares. As of the date of this report, the Company has issued and outstanding 14,845,834 Shares.
So here is my opinion:
CEO and Co executives agreed to raise money by selling hugely authorized shares count. How can they do it if stock is totally beaten down? They worked out 'CEO go-private offer' $3 per share, non-binding of course.
CEO made it out loud, lifting shares PPS,… BOD responded they like it to consider. The same day, company immediately started transferring 35M shares to Stock transferring agent who authorizes MMs to dump shares from that day on till basket is empty, thus increasing the float from 11M to 35M, and killing pps.
What will happen next?
IMHO, in a few days BOD will reject the offer as inadequate, and ‘rightfully so’ as formal (to that date) book\share and cash\share is outrageously high for lowball $3 offer ..., or they might demand better pricing, and then CEO, in his turn, will reject to increase offer(rightfully too). Anyway, the deal will fall apart.
Net result: Company will be able to raise money to live on in fancy style, through selling 35M shares to baggies, CEO will end up selling his stake too. In a year or so CEO will come back to ‘save’ the Co. This action is\will not be not illegal by all the parties involved: the Co., The BOD and the CEO – are all clear.
Who wins: Chinese Co, who loose: US baggies.
I DO NOT STATE I AM FULLY CONFIDENT that my opinion is 100% correct. My opinion is based solely on pps action after ‘go-private offer’ been announced and afterwards. The offer could be legit. The BOD could be legit. The co could be legit.
BUT, so far PPS action says my opinion is quite feasible.
Ok you can make sense of the $3 offer that way. On a positive, in these last few days Tibet Pharmaceuticals has raised there notoriety by a few points. From a marketing standpoint, it raises awareness of their brand. Depending on how many did their DD, nearly everyone who did is clear there is $1.75 avail to common, and more eyes saw their recent news with Anhui Taihe Pharmaceutical Group. To tarnish their name to the west seems counter productive. To issue shares to cooperating companies sounds like it would offer greater value
The authorized was never 3M. That was the number of shares offered in the IPO. Authorized shares are the maximum amount of shares the company can issue. So if they want to expand the business they could offer another 50M - 14M = 36M shares. But they have to put together a prospectus first and file it with the SEC. Then they have to round up investors who are qualified to participate. Then they sell the shares to the investors. All of this must be above board and legal.
Now what I find odd about this company is 3M shares were offered in the IPO, with no secondary I could find, yet 7M shares are in the float. That tells me that some insiders have since registered their shares (from the pool of outstanding shares) and sold them on the open market. This should show up in an SEC filing, yet I couldn't find one. So the company is not following the law. That is a red flag. That's why I dumped my 15k shares at a .12 per share profit. If after they buyout was offered and the document filed with the SEC, the relentless selling continues unabated, something is seriously wrong. Someone is doing something illegal, IMO or else they are dumping their entire stake and plan to register afterwards. Could also be naked short selling by investors who are considering a secondary offering that has not yet been made public.
I like you insight and raised red flags. Thanks God, I haven't initiated any long position today, though I was very close to do a small one. But, well, the more I was thinking of it the less I had intention to touch it.
MOR-ZE This is the most pathetic post I ever read over the last few years. Instead searching for manipulation among Chinese try to find the manipulation among wall street crooks.
I will repeat : this company is too small to pay huge amount of fees to NYSE and to see their share price down , bellow 1 usd for no reason.
in the second half of 2012 many small companies traded on NYSE will be in the focus of private equity funds will billions of dollars looking for cheap valuated companies in CHINA !
SO far 9 billions US dollars have been prepared for those operations.
SO WHY the CEO have to wait until he become of victim of those who short all China stocks and now want to buy them at deep discount ?
As a trader with 10 years experience of WALL STREET , I will say that this is the bottom...1.36-1.40 !!
This is all game from MM on NYSE !
They try to rip all small swing and daily traders!
I said few days ago, that only the real investors will make a killing here !
The deal will be done in 1-3 months time frame !
what you say sound absurd to me !!
You do not know what you are talking about.
If they dilute their share price , the MM will be the first to kill the share price. Trust me, The MM use their own money and every dilution will be done deep bellow 1 usd..around .30 cents ! not at 1.80-2.30 price range !
your theory is wrong !
the moment I read you speak of TBET as NYSE company... sorry dude, I stopped reading further as it seems to me a complete BS. Please care to check where TBET is traded FIRST.
10 years of experience, LOL By the way it hits you 1.3 lowest pint, what are you gonna do NOW, experienced trader, LOL
$3 'go-private offer' works perfectly for all the parties involved. For BOD it is a lowball offer - so they can 'rightfully' reject it. Nobody would announce legal investigation why BOD rejected low 'offer'. For CEO it is a right reason not to increase the offer as he 'might' not be able to find 'adequate financing'. $3 'offer' is excellent to attract baggies (remember stock was trading around $0.6, before the offer) and keep away legal firms from their investigations of offers
Again, it is my IMO.
I can imagine the scenario of the 'up to 50 mil shares being sold into the volume however it would benefit the seller to allow the price action to drift up instead of hedging down with a continual relentless sale. If they are diluting the shares it seems that patience would be a better practice. As well, why not offer a lot more than $3 if the plan is to sell into the baggies? That is, If I understand you right?
ssgreto apparently has no rebuttal other than to say that you're ignorant, rude, and/or stupid. We know he cares what board readers think, or he wouldn't have posted that long post supporting the buyout. Anyway, authorized shares can't be sold any old time; they have to be registered first. I'm not going to go to the trouble to look through old SEC filings, because I strongly doubt that all of TBET's authorized shares have been registered with the SEC.
If they love to be locked up and get free room and board plus medical in a US jail, they should go ahead with this scheme:
...The same day, company immediately started transferring 35M shares to Stock transferring agent who authorizes MMs to dump shares from that day on till basket is empty, thus increasing the float from 11M to 35M, and killing pps....