I thought this company is legit. Now I do have some doubts.
The management claimed they went to the market for 13.2% loan simply they did not want to pay 10% tax to send the money into US.
But, 10% tax vs 13.2% annual interest is nothing.
Apple went to the bond market, because they borrowed under 2%
XIN did some stock buy back and dividend, then all the money they paid for dividend and buy back was significantly less then the 200 million bond they issued, where are all these profit?
The company stopped buying any shares when the stock was traded over $5, even they claimed the book value is $11 the stock is cheap. They made this claim repeatedly during the last two conference call. So if the stock is cheap, why don't they buy. I don't like lip service.
In theory, most of chinese real estate comanies are making money, there are something going on, it does not add up. Could be the management take the company's cash for their personal use?
I copied something from their 10K.
Our regulator may, and in some cases must, place us into receivership, which would result in the liquidation of our assets and terminate all rights and claims that our stockholders and creditors may have against our assets or under our charter; if we are liquidated, there may not be sufficient funds to pay the secured and unsecured claims of the company, repay the liquidation preference of any series of our preferred stock, or make any distribution to the holders of our common stock.
We could be put into receivership at the discretion of the Director of FHFA at any time for a number of reasons, including conditions that FHFA has already asserted existed at the time the then Director of FHFA placed us into conservatorship. These include: (a) a substantial dissipation of assets or earnings due to unsafe or unsound practices; (b) the existence of an unsafe or unsound condition to transact business; (c) an inability to meet our obligations in the ordinary course of business; (d) a weakening of our condition due to unsafe or unsound practices or conditions; (e) critical undercapitalization; (f) the likelihood of losses that will deplete substantially all of our capital; or (g) by consent. In addition, FHFA could be required to place us in receivership if Treasury is unable to provide us with funding requested under the Purchase Agreement to address a deficit in our net worth. For more information, see “— If Treasury is unable to provide us with funding requested under the Purchase Agreement to address a deficit in our net worth, FHFA could be required to place us into receivership .”
A receivership would terminate the conservatorship. The appointment of FHFA as our receiver would terminate all rights and claims that our stockholders and creditors may have against our assets or under our charter arising as a result of their status as stockholders or creditors, other than the potential ability to be paid upon our liquidation. Unlike conservatorship, the purpose of which is to conserve our assets and return us to a sound and solvent condition, the purpose of receivership is to liquidate our assets and resolve claims against us.
From the court order, it looked like Peter Deutsch tried to take ZSTN private. So it asked ZSTN to open its book so they could examine the book. Obviously, ZSTN refused it. So they tried to get the court order and forced ZSTN to open it's book.
I guess He will have a hard time to face his client(Dow hit all time high). He managed a very small hedge fund, basically he lost all his client money(including his) by investing on CMED and ZSTN.
Some people is still hoping that ZSTN could go private. What a joke, what a scam.
Peter E. Deutsch really did not have any inside knowlodge about ZSTN before got in to this junk.
The order is from US court, ZSTN could just simple ignore it like it has been doing in the past year.
Loan to capital stands at 47:1, according to the mtg, they need to get approval from most of the state to write new business for over 25:1.
The stock could go down big today because of that.
At least on Paper, RDN has about 1.7 billion capital surplus, MTG has only 200 million. MTG could be seized by regulator any time.