My "rhetoric" goes against my very self-interest. I've had a position in this company for 7 years.
On the other, hand, defending these clearly manipulative practices seems very close to your heart.
On the bright side, the stock has successfully been buried so that the company was able to buy their shares at a fraction of fair value. I think they want the stock to go up now.
But pray tell... where did Mr Yan get these newly printed millions?
Clearly you haven't been paying attention to the way US-Listed Chinese shares have been behaving and how executives in this niche have brazenly stolen from long-term investors by pumping their companies and then going quiet only to reappear by buying back their shares for pennies on the dollar.
Look, I don't want to accuse you of purposefully misleading, as you may be one of those innocently misled. However, at this point, you have to lack any understanding of corporate actions or be intentionally lying to oneself to not be able to easily deduce that many US-Listed Chinese companies want there share prices down.
The main reason why this is the case is because the US has not only LESS authority over these foreign-listed firms, but also less restrictions regarding issuance of new shares. The fact that foreigners pay NO tax on investments profits and have unique protections like Regulation S, which they don't only benefit via loosened restrictions therefrom, but also benefit from the inability of US authorities to pursue them after explicitily breaking securities laws or bending them as far as possible against the intention of the original laws to their benefit.
Reminds me of a an announcement from a few years back. Executive comments echo the same nonsense in response to the buyback in 2010, clearly written by the same English speaking PR people. Clearly the company itself didn't polish the management's comments which can easily be deduced by comparing their comments to the press release in Chinese where their English-language graphic attests "E-FUTURE CLOSED OF PRIVATE PLACEMENT". That said Chinese version left everything in place in the recent press release except for mentioning the about "seeking out to maximize the company's value". I would have recommended adding... "to current investors".
eFuture Announces Share Purchase Agreement
BEIJING, Sept. 27, 2010 (GLOBE NEWSWIRE)
Regarding that executive purchase of newly minted shares, Adam paid $819,500, or ¥5,482,455, out of pocket, as the USDCNY exchange rate was 6.69.
Adam somehow had access to ¥5,482,455, while his annual salary+bonus was only $72,600 dollars while paying between 20%-25% in income tax if you compare against graduated chinese income tax table from 2010. At about $51,000 take home pay, it was unclear where he got the funds to make this purchase, especially considering he was spending all his time building up E-Future and apparently had very little time to communicate with investors. When I pressed them, the company claimed that he sold his large family home and downsized in order to free up the $819,500 dollars to buy new issued shares amounting to about about 5% (at the time) of the company.
The company conveniently leaves out the breakdown of who bought how much of the private placement this time, which tells me they know it would merit questions regarding where the money to purchase the private placement came from.
Check out Adam's Salary...
2013 Salary = ¥ 813,965 ¥ 121,883
2012 Salary = ¥ 540,000 ¥ 81,179
2011 Salary = ¥ 455,689 ¥ 123,368
3 Year USD salary = $344,520 BEFORE TAX.
All of a sudden he's the lead of $3.2M investment?
At this point, as if it wasn't already obvious, there is no reason to assume that the company have the shareholders interests in mind. Very little about this company and the way it trades makes sense unless you believe that the price has been managed.
Where this is most clearly evident is as the price moves instantaneously on positive news released after hours, much like it did early last month. The price literally moves the very minute the press release comes out. Volume in the after-hours was not followed up with aggressive buying the next day, as many of these Chinese companies have chased away all the momentum traders who buy this kind of stuff on positive news as most people that have been burnt before and now know that manipulation is the end-goal rather than share price appreciation. The only buying at the ask price occurred during a short period when Tim Sykes issued a buy-alert and his followers chased up the stock from $4.70-$5.10. I think it is pretty obvious to most people who frequent this board that there aren't many people with deep pockets holding their breath every time an E-Future earnings release comes out waiting to pounce on the stock within seconds after a quarterly beat.
You'll also notice that big bids come in right before positive news is released. It is hard to find even one instance where there wasn't a bit of volume coming in right before the news often accompanied by a massive bid of 25,000 shares 1-4% below the current stock price. If the reader has any experience in the markets, I doubt they would argue that EFUT price movement over the last few years doesn't scream out that the price has been being managed within a range.
If you think that these guys would be forced to report each purchase and sale, you haven't been paying attention. Although in our position we can have no 100% physical proof of manipulation without being in a position of authority to trace each trade, nothing stops these guys from failure to report.
Company will have to pay the $2.75 in order to digest those shares, but I don't know who is going to be selling as the volume has pretty much dried up. I personally own a fairly large position that I've been accumulating and will likely not be participating.
I imagine some long-term holders disgusted as the price-action and the management will take the opportunity to get out at $2.75, but I don't see how they'll pick up a substantial percentage of the remaining float at $2.75.
I think they'll have to raise the offer. At $3.75, I'd consider the sale of my shares, but I think the inherent value of the company is a bit over $4.00.
Thanks for the reply TRF,
Thanks for the reply TRL,
I'm not sure the model of rapid growth through acquisitions will prove to be a viable business model. The kind of businesses NVEE are buying would seem to need hands-on management and local connections.
As for the current share count, it is a bit higher than at the end of 2014. The most recent acquisition released new shares onto the market. The lockup on those shares won't end until next January. But that would add another 100K to the O/S count.
The most recent acquisition was supposed to generate about 10m in revs which would be immediately accretive. That extra 10m is included in the 2015 projections and in turn makes the growth numbers look a bit less exciting than most people here seem to believe they are.
P/S ratio is an important metric, especially when comparing a small-cap stock like NVEE to its peers. Again, with the P/S ratio at the very top of its sector, that's a warning sign for a small company like NVEE. I simply don't agree with you that P/S ratios should be ignored if the company is showing a profit.
... especially not good if you consider that the guidance given for 2015 revenue includes the dilutive first quarter acquisition which pushed the O/S to about 5.9 million and added additional interest-bearing debt.
The company's 61.5% increase in accounts receivable is concerning. I don't see any explanation for why there was such a rapid increase within the report - perhaps they alluded to it in the conference call but I did not listen to it. My guess would be that it is acquiring companies that may have collections problems where the selling private company is selling at a discount to get out and NVEE wants to want to exude the appearance of growth to get its stock price up.
If you disclude pass-through revenues, the P/S ratio of this technical services company is about 1.15, the highest in the industry. They also doubled margins in an industry where margin growth remains pretty flat over time. I doubt the margins can continue to grow as they are already highest in the industry as per yesterday's 2014 numbers.
Looks overvalued to me here, but the market will decide the reality over the next few weeks regardless of my opinion - which may be a bit oversimplistic.
Moreover, check out JRJC valuation. Xueqiu gets 21 times the traffic according to the most accurate analytics site in the world; similarweb.
JRJC has a 132 million dollar valuation. If JRJC can merit that valuation, Xueqiu should merit 1.5-2 billion, and I imagine it will.
Moreover, RENN invested 40m into Snowball, not 10m as you stated. I imagine this investment will end up gaining 4-5x and is being dramatically undervalued on the balance sheet at the moment.
And we haven't even considered the effect of the Sofi IPO yet.
Yeah, the same Snowball that owns xueqiu, the fastest growing financial news site in China which also happens to be social. If it IPOS, will likely IPO over 1 Billion. Valuation has at least doubled since RENN injection.
During every oil price meltdown one of the majors makes an acquisition.
I wouldn't be surprised if one of the Deep Water Drillers gets salvaged from the scrap heap and incorporated into one of the majors.
I don't think RIG investors who actually move the stock take a look at spot. Only futures (of all durations) push this stock higher and lower.
That being said, I can't see what is pushing this stock up today as short, mid and long term dated futures all had dropped; at least they did the last time I checked.
China Construction Bank should be changed to China Development Bank... sorry for the mind-glitch.
I don't think the point would be to have a bidding war and have multiple parties "bid the company" up to "where it belongs", I think the point is to allow the main stakeholders on the Chinese side to get it all back and run the company privately.
If specific individuals located in China were guilty of suppressing the price, it's important to note that they are largely out of the purview of US law. So whose to stop them from doing this IF, and I repeat IF, this is the case?
If you take into account the history of US-Listed small cap Chinese companies, why would you trust any of these guys like Adam and Co. to act ethically and pay fair value when they don't really have to? So far who has been punished by Chinese authorities for crimes committed on US investors during the 2011 fiasco where collective tens of billions of dollars of investor capital was swept over to China through either poor financial reporting standards or outright theft of investor capital.
Don't take it from me. Mckinsey, a well-respected global management consulting firm, comes our with a quarterly journal. In one of the articles from a recent addition, an observer noted;
"The SEC doesn’t face a problem just with Chinese audit firms but potentially with any audit firm outside its regulatory purview. And the SEC is not the only regulatory agency facing this problem, since every other major capital market could face the same experience, particularly given the growing competition among stock exchanges.
To close the gap between US and Chinese regulations satisfactorily, the countries’ two regu- latory agencies must collaborate; both sides urgently need this to happen. The solution offered by the Chinese regulators falls far short of genuine cross-jurisdiction cooperation and to date has not been fully tested. Hence US investors are still forced to take on faith the content of audit reports, and neither they nor regulators have timely mechanisms to take action against fraud.
Are you OK? Or perhaps drunk?
The reality is that many Chinese companies don't want their share price elevated because it would cost them more to then take it private. The Chinese Government was incentivizing them to go private a few years ago, and I imagine that may be the case again. Do you think China Construction Bank wanted to get less bang for their buck in bringing these small-cap US-Listed Chinese stocks home? I'd say not. Do you think they have any loyalty to US shareholders holding shares of China-based companies? I'd say not.
If you think Wall Street hedge funds or market makers are to blame for the low share price, you would be beyond ignorant. Neither have any incentive to suppress to share price of a micro-cap Chinese stock.
Fact of the matter is normal stocks don't trade like this. Although, of course, it's not just E-Future, but E-Future is one of, if not the most, obvious stock with a clearly manipulated trading pattern. Many other Chinese companies show equally bizarre charts and trading patterns that defy common sense.
I'm of the feeling that just get it over with and take it private sooner rather than later. No need to continue the silly games.
Does everybody get what's going on now? I'm not sure if this is the right place to explain it in fine detail, but it is clear as day if you have eyes to see.
The listed company which has since been bought out... please read the prior post by selecting on the Messages tab rather than the Topics tab.
Eh... but who really knows. Nothing is as it seems in China... wouldn't be surprised if they effectively hold over 50%.