Not sure what to make of it other than maybe the company was a heavy buyer down below $3 and has pulled back now. In terms of the news cycle there isn't a reason to be buying since the data out of China last night was not great. It isn't giving us any reason to believe the credit situation has improved. The valuation for the listing is still a mystery and at least 5 months away.
I do once in a while. Nothing has changed. Within the last couple of days he told the old lie about why they left the Venetian and in another thread said he has been right about everything when all you have to do is read your posts to see he has been wrong about everything. His huge, unjustified ego is amusing.
"ATHM Debut Shows Chinese IPOs Are Back
The explosive market debut of Chinese car retail site Autohome (ATHM) revealed plenty about ongoing Wall Street support for the world’s second-biggest economy. But for U.S. investors hungry for access to that economy, it’s also a great sign that bigger opportunities are lining up on the horizon.
ATHM surged 75% yesterday from an offering price of $17 on a wave of buying that few of the more vocal China bears could have predicted. Bracketing the company’s fundamental merits for the moment, the investment thesis here is painfully simple: even after years of China being touted as the hottest story on the planet, high-quality exposure to that story has been too scarce to satisfy demand."
Maybe there is better view of Chinese equities??
Pretty good summation. There's no institutional support, no valuation where anybody will step in because who knows where earnings will be next year if credit play doesn't come back. All those retail shares bought during the offering at $3 are under water and the HK listing catalyst, if there is one, is months away. There is still 3 weeks of tax loss selling left this year and it will probably be down most of those days.
I can see how you feel burned by the offering. Just remember management doesn't have to go by the self imposed rule of making stock purchases accretive to earnings. For example, they could be burning up cash just to get the stock price up to the $4.50 they paid for the shares they bought during the offering and dump them. Shares they didn't have to pay a premium for in the first place. I think management made the decision in the long run listing in HK was worth diluting the stock. They didn't do it to screw anybody. After all management is still the largest shareholder block by far. They have a huge investment in the stock so why in the world would they be doing things to decrease the value?
I did some research on this acquisition. The junket had $462M of profit in Hong Kong dollars in the first 10 months of 2013. That works out to $554M over 12 months or $71M US dollars with 86 tables. When you look at how many tables IKGH had on average for the year they seem to be generating more money per table. I guess because of their emphasis on high end players not cash players.
It's pretty hard to figure how this would relate to IKGH's value or even to what they paid for the rooms they bought. The out of pocket expense is $20M initially plus $39M in payments less by the profit the room makes. If the Royal Arc room makes $5M a year they would really be paying $24M in payments since the room would make $15M over 3 years. In any year the room didn't make $5M, or I guess I should say didn't do $2.5B in RCT IKGH keeps what ever profit there was and pays nothing. Or it's possible the room could make more than $5M in profit so IKGH's out of pocket cost is lower. Lots of different possibilities.
On the surface Natural Foods appears to be putting up a lot of cash, $51.6M, to get $3M a year back and I don't understand the 100% ownership, 5% profit thing either. To me it makes IKGH's deal sound better considering they get to keep all the profits and then pay nothing after 3 years.
If my math is right Neptune's share count is over 70x that of IKGH. Their business models could be exactly alike but with that kind of share disparity comparing p/e's is worthless unless the earnings were somewhat the same. But they aren't. The only thing Neptune is good for is showing even a stock like that can get a 4 p/e in HK.
They have enough idle cash not being used in the cage right now to retire more than half of the shares issued for the rights offering.
I can't speak for everyone but I've enjoyed watching you completely dismantle every argument MM has put forth. Each time he tries to defend himself he digs a deeper hole. Keep it up.
They make money now, they will make more when credit loosens. I get paid to wait for loosening credit and for a better valuation in HK. Case closed.
I didn't hear anything I didn't expect to hear. I wish they had given more color on the buyback but as things are in a constant state of flux maybe they aren't sure if committing capital to buying shares is the best thing to do right now. My biggest concern is where credit VIP goes from here if China's GDP isn't going to do any better than 8% in the coming years. They will still be a cash flow positive company but at a slower rate and with lower margins than before.
The other thing to remember is that I was told the exact nature of Neptune's investment in these companies is clouded by not really knowing what rooms being run by the promoters are being invested in. So IKGH is much more transparent on top of everything else. We know what rooms they run and we know how things are going month to month.
This appeared in MacauBusiness.
Nasdaq-listed Iao Kun Group Holding Co Ltd will seek a new sponsor for its dual listing at the Hong Kong Stock Exchange.
The principal of the junket investor’s original sponsor died unexpectedly in September.
The company said the new sponsor would have more experience and be more widely recognised in the markets.
If it can appoint the new sponsor before the end of this month, as planned, its shares can be listed as soon as late January.
The company promotes gaming rooms at StarWorld Macau, Galaxy Macau, Sands Cotai Central, City of Dreams and Le Royal Arc Casino.
I think they are confusing the application with the listing. But it shows the media is following the story so they must think there is interest in the company or they wouldn't bother to cover it.
these guys are creeps.
I was thinking the same thing on both fronts. That the fall was due to the guidance cut and that Friday's volume and decline was a harbinger of bad news on Monday. Hopefully RCT stabilizes around 1.4-1.6B until things get better with the large credit players. The thing about those cash agents is I bet there is a lot of competition for them. Not easy to bring in to the fold without an incentive, meaning more commission money for them and less for IKGH.
I don't know where buying becomes accretive but I do know this. If management was looking to pull a fast one as some accuse them of doing they could use some of the over $200M in cash to prop up the price to a point where they could sell the shares they bought at $4.50 during the rights offering, but they haven't. It would be interesting to know where the accretion level is though.