Doubt wall street have much to do with this stock. It is probably asian funds doing most of the trading on this stock to be quiet honest. they are much closer to the action, on the ground in China, snooping away to gain an advantage on info. This is a volatile stock, big money can be made going either direction so it was worthwhile for these guys to do their homework out there.
Frankly, I'm surprised Ameritrade even allowed any margins on STP before ever since the first few reverse merger blowups 2 years ago. I thought all Chinese stocks must be bought on non-margin accounts by now. I've never bought this stock so I don't know but I use Ameritrade.
shares issuance is based on shares authorized. If a company has 10 million shares authorized and 3 million shares outstanding, they can issue 7 million more shares subject to board approvals etc. But you get the idea. That brings up another issue, the more shares STP issue in an event to compensate bond holders for some of their losses, the less likely the share price can recoup above $1 - the NYSE exchange minimum. It is almost a bottomless pit - issue shares and they can get kicked out of NYSE but if they don't they go bankrupt - not good choices. It is very difficult to see how STP can maintain NYSE listing if they issue tons of shares and why bond holders would see any value from receiving shares aside from shorting the stock ahead of time to gain.
There are exceptions. Sometimes stock plunge will cause bankruptcy. Some companies have financial convenants that cover their stock prices such that if it breaches a certain price, it triggers payment that they can't meet. Then there were those death spiral instruments where as stock goes lower, more shares have to be issued to make up for the investors losses...and it spirals out of control and company goes belly up. Lehman Brothers problem was their plunging stock price that cause customers to lose faith and pull money that made their situation worse and they went bankrupt. They still might have gone bankrupt even with drop in stock price but that is debatable.
a typical convertible deal from the get go is hedged by puts and shorts on the stock. That is awhile back, but that is the typical mode of operation for anyone buying into a convertible bond issue. If stock goes up, you can covert and cover the short, if the stock goes down, you make money on shorts and puts. So yes, most bondholders and even creditors are probably hedged on the downside. Look at all those outstanding puts! that is what spooked me from buying anything here despite how low it went - then again it did spike to $1.70 so that have been good to go long late December but can't risk when these headlines turn negative.
A friend close to a solar player said the way these guys like Shi get rich so quickly is largely due to the fact that Chinese govt (provincial and regional) has so much money to give for certain industries and anyone with good connections can piece together a company and work with local officials to get sweet funding from loans, to land and to all sorts of perks. Of course everyone gets a piece of the action, the local govt gets some kick back and the headlines in the community that they are doing something good with goals of getting promotion to other top jobs and the operator like Shi gets the big riches. This is the way a lot of business are developed in China, not all bad, some very successful and become real players. But the hard sweat that goes into building a real business without a big handout, and the accountability and risks of losing personal wealth is largely absent and that is the trouble with these govt sprung private businesses. Shi might have lost his solar company but he is still worth hundreds of millions. He knew the right people, played the game and the success of Suntech would have been all gravy...but he isn't walking away a poor man.
the Fed is making this about them front and center in the stock market. They claim they don't target asset prices for awhile and now openly admits that they believe higher asset prices is good in their book when they can't hide their intentions anymore. This isn't a transparent FED, this is a FED gone wild who thinks it can solve all economic problems with the printing machine while casting some ridiculously low inflation numbers that is so far from reality because of the components they leave out to suit their purpose. Bernanke isn't even going to be around to unwind the debt mess at the FED. He is going to work at some Wall Street firm to get his pay back.
Things to consider the NYSE listing rules require minimum of $1 print on average for 30 trading days so the clock starts now. Depending on how low this can go, there might be some short covering spike to close the position, but that can be months away and price can probably go lower before it goes higher. The real question is what purpose is for STP to remain a listed entity in US now? they aren't likely to get any funding in US markets for the forseeable future - if ever. If the Chinese local govt and the new decision makers really want to maintain a NYSE listing - maybe to keep face in the industry? (if there is any thing worthwhile salvaging?) then they'll have to pony up the dough to keep the bid up at over $1. All signs to me tells me a delisting is very possible and price going much lower here. I like to check the options going forward to see where they are expecting this to turn out.
even without STP, the US market destination for Chinese companies seeking capital has been little to none in the past few years due to a lot of these reputational issues - largely on concerns of reverse mergers scams. In many of those cases the companies have little or no assets, bad accountants, and fraud written all over it. In this case, it is simply a horrible industry fundamentals and poor mgmt that did the company in. It does have physical assets and it did produce something tangible. I don't think the door is closed shut on Chinese companies seeking capital, but the cost of capital is probably a lot higher when you throw in these extra risks that foreign investors have to face. HK market is now the destination of choice for Chinese companies anyway.
FED owned a chunk of AIG stocks. What more evidence does one need. the dumb running and weenie towdler are both full of b #$%$.
ebay stock behaved like #$%$ this year, and as usual big boys know pretty much the results are probably going to disappoint. Retail sales data are decent overall for the market and this drops 4%+ breaks key support lines. Damn.
what possible value stocks are out there with all of these all time highs? if they are value stocks still, they must be trash. Yacktman was diplomatic when he said things look cheaper 3 months ago. I'm guessing by that he means he ain't touching this market.
various sources indicate that retail investors are starting to buy. So it is hard to know which source is more reliable. My guess is that retailers are just getting in and usually they are the last to the party but I also believe hedgies are playing games in this market too. Today's Dow close on the green in the last few ticks is pretty clear manipulation to paint the tape green and someone wanted to make sure the Dow trend remain intact. Good for newspaper head lines, but clearly manipulated
the USD has been strong against a basket of stocks especially Yen. It suggests inflow of foreign capital in US market buying US stocks - at some point the strong USD will hit US globals and make them less competitive. And that is when EEM probably start gaining strength and US markets retreat.
teenie dummie here on a teenie position, figure Cook can't be that dumb to see price go down to where he took office. I guess I'm wrong. No biggie. Probably out tomorrow. Don't want to hang around to 380.
about 6 weeks to go before earnings. Looks like Cook refuses to play dividend game so likely below $400 before earnings.