|Bid||2.1100 x 1300|
|Ask||2.1800 x 800|
|Day's Range||1.9842 - 2.1800|
|52 Week Range||0.4000 - 13.4000|
|Beta (5Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
The big shareholder groups in Kaixin Auto Holdings ( NASDAQ:KXIN ) have power over the company. Institutions often own...
While investors don’t as a rule connect China and its used car market, there’s no doubt a big opportunity there. Isn’t there always when to comes to the world’s number two economy? And in the case of Kaixin Auto (NASDAQ:KXIN), the brass ring (or hubcap, if you like) seemingly presented itself through KXIN stock. Source: Shutterstock No more. At least for the mystery-shrouded, sorta-shady-who-knows time being. Trying to retrace the recent KXIN stock quagmire requires a master’s degree in sleuthing. (Mine is in communications, which in this case, Dr. Watson, is borderline useless.) That’s because no one really knows much about Haitaoche, a private Chinese firm that assumed a majority stake in Kaixin this past November.InvestorPlace - Stock Market News, Stock Advice & Trading Tips From there, the questions multiply. Why did Haitaoche do this? Should this move inspire confidence or concern? Do the folks at Kaixin Auto know what they’re doing? And how exactly did a clunker of a social media company called Renren get involved? KXIN Stock and the Big Picture For those holding KXIN stock, times couldn’t be worse. Even bonafide, multi-billion dollar Chinese auto players are weathering pressure from Capitol Hill. 9 Long-Term Stocks for the Next Decade On Dec. 18, away from the headlines of election fraud and transition turmoil, President Trump signed an obscure piece of legislation aimed at China’s public companies. The Holding Foreign Companies Accountable Act punishes firms that do not comply with auditing oversight rules. It requires publicly traded companies to delist from American stock exchanges if they’re not financially forthcoming. Even multi-billion EV makers such as XPeng Inc. (NYSE:XPEV) and Nio (NYSE:NIO) are feeling the heat, though they’re highly likely to pass the sniff test. Can the same be said of Kaixin? Let’s put it this way: Don’t even bet your rusted ’84 Aries K-car muffler on it. A Clueless Company’s Mystery My InvestorPlace home boys Josh Enomoto, Mark R. Hake and Matt McCall have all done a bang-up job trying to untangle the KXIN stock mess. Check out their pieces to get the full picture but let’s start with a no-brainer. The one way not to impress federal officials is to hire an auditor that’s run afoul of the U.S. Public Company Accounting Oversight Board (PCAOB). On Dec. 11, Kaixin announced that it had appointed Marcum Bernstein & Pinchuk LLP as its new auditor. The question is, why on Earth? Less than two weeks earlier, Hindenburg Research issued a scathing report on Chinese EV maker Kandi Technologies Group (NASDAQ:KNDI), indicating that the closely-tied Marcum LLP auditing firm “was just handed a three-year ban from auditing Chinese companies” by the PCAOB. Hindenburg’s word on EV shenanigans should never be taken lightly. It exposed the brazen investor deception at Nikola Corp. (NASDAQ:NKLA) that led to the ouster of founder Trevor Milton. And from there, KXIN stock watchers, it just gets murkier. It’s not clear how Haitaoche, founded in 2015, managed to recently land a 51% stake in Kaixin with no money down. That’s a sweet used car deal if ever there was. It’s only known that the way was paved by Renren (NYSE:RENN), which Hake describes as “a sort of failed social media company in China.” Danger: Electric Shockers I’m not sure I can follow what comes next. But it appears that Kaixin brought in 95.7% of Renren’s revenue in 2019, while Haitaoche is an e-commerce platform for luxury cars including BMW, Mercedes-Benz and Land Rover. But what is it, really? With something as simple as how many employees work there or its URL — hey, this is supposedly an e-commerce site! — not even Bloomberg can say. Given how all of this makes “clear as mud” look like “clear as crystal,” your money is better spent on a casino road trip than KXIN stock. Working out corporate trouble is one thing. But practically daring a government watchdog to make you a test case of an aggressive new law? And consorting with the corporate equivalent of a shadow puppet in a lightless cave? That sounds about as smart as licking an oozing lithium-ion battery in a lightning storm. You should stay away. You must stay away. Come 2021, I think there’s a better chance of reading a “just delisted” headline in reference to KXIN stock than anything else. But why not get a head start? Revise your tally of portfolio possibilities and delist it now. On the date of publication, Lou Carlozo held a long position in NIO. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner Radical New Battery Could Dismantle Oil Markets The post China’s Kaixin Auto Is a High-Voltage EV Danger appeared first on InvestorPlace.
We’ve seen some crazy rallies this year. Some have had a bit of logic. The staggering gains in Kaixin Auto’s (NASDAQ:KXIN) KXIN stock do not. Source: Shutterstock Since Oct. 13, KXIN stock has gained 667%. That fact alone doesn’t necessarily doom the stock. We’ve seen steep and fast moves in a number of stocks and sectors, in part due to the novel coronavirus pandemic. Developers of Covid-19 treatments and vaccines unsurprisingly soared when the scope of the pandemic became apparent. “Pandemic winners” like videoconferencing providers or e-commerce companies spiked once investors recognized the beneficial effects of the pandemic on those industries. Electric vehicle names have won big thanks to political factors and growing commercial demand.InvestorPlace - Stock Market News, Stock Advice & Trading Tips KXIN has traded like it belongs to one of those groups. But it doesn’t. Rather, these huge gains seem driven by a speculative frenzy that isn’t going to last. An Unbelievable Four Days The rally that KXIN saw in October truly was spectacular. On Oct. 13, the stock closed at 54 cents. Volume of 19,000 shares was somewhat lower than normal, but not totally out of line. The next day, KXIN rose 267%, closing at nearly $2. Volume cleared 60 million shares — more than 3,000x the previous day’s activity. A 32% sell-off the following day with ‘only’ 6 million shares traded suggested that at least some traders had moved on. 7 Growth Stocks You Don't Want to Sleep On They hadn’t. Kaixin stock rose 55% on Thursday, Oct. 15, and then topped it off by soaring 294% on Friday. That day, incredibly, 235.3 million shares traded hands. That figure was roughly 7x the number of shares outstanding, and nearly 200x the float (at least based on publicly available data). All told, KXIN would gain 1,400% over the four sessions, moving from 54 cents to over $8. That’s a truly incredible run. What’s more incredible is that there was no apparent reason for the gains. Kaixin itself told MarketWatch that the move “came as a surprise.” And the volume associated with the rally in fact supports that contention. This wasn’t the market reacting quickly to news that materially changed the outlook for KXIN stock. This was day traders going nuts. No Bull Case for KXIN Stock Unsurprisingly, KXIN would drop by nearly two-thirds over the next trading sessions. The stock saw another huge spike in November, tripling in two days, but as I write this the stock sits back near $4. That’s still far too high a price. There’s just nothing here. It’s possible some investors see KXIN as a play on Chinese electric vehicle growth, but it’s no such thing. The company formerly ran used car dealerships in China, but shut that business down this summer. In November, Kaixin announced plans to merge with a firm named Haitaoche. This essentially looks like a reverse merger, with Haitaoche contributing its automotive retail platform in exchange for 51% of Kaixin stock. That agreement appears to have contributed to the brief parabolic gains in November. But there’s not much here, if anything. Haitaoche doesn’t appear to have a business yet; rather, it is aiming to enter the hugely crowded space. And investors who believe Kaixin can become an EV play with Haitaoche should read the press release announcing the merger. It seems difficult to believe that a company that wrote repeatedly about targeting the market for “electronic vehicles” — yes, “electronic vehicles” — is going to be a factor in China’s electric vehicle market. What’s Going On? So, what’s going on? Surely there has to be some bull case for KXIN stock, right? Whatever it is, it’s almost impossible to see. Essentially, the market seems to be valuing Haitaoche at close to half a billion dollars, given that Kaixin will own 49% of the company and has a market capitalization of roughly $244 million. Some investors might believe that Kaixin’s dealerships could come back, but if that were to be the case then the Haitaoche deal makes no sense. There’s no evidence that Haitaoche is worth $500 million. In fact, there’s no evidence that Haitaoche is worth anything at all. There’s plenty of evidence, however, that KXIN stock has traded in a way completely unmoored from any sort of fundamental analysis. The problem with that kind of trading is that it always ends at some point. KXIN will be no different. On the date of publication, neither Matt McCall nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in the article. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner Radical New Battery Could Dismantle Oil Markets The post Kaixin Auto Stock Is an Obvious No-Go appeared first on InvestorPlace.