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the obvious message here is if siaf had all these profits they wouldn't have any of these problems.
trw isnt making money if it never pays siaf back.
on the other hand, the behavior of this company is consistent with distress and maybe fraud.
what has this company done that a non fraud or non distressed company does?
all it does is report profits and then does everything unlike a profitable company.
fake write up of assets, etc. return on assets is garbage.
the dividend is a waste of time, its 2.5 cents if the common goes up 10 cents its 4 years of dividends. everyone thinks the common is worth way more that is holding that 2.5 dividends even for a few years wont move the needle.
Jyoo I think you are right. $2.80/112.5 shares = .02488, I made it a percent instead of cents.
so 2.488 cents dividend on a present value of .24 cents is 10%+ yield.
I am referring to the S-4 not the concurrently issued S-1 for new cash.
Do you even skim at the documents? Press release? anything? Just post here about how you haven't lost money and you are buying more?
For most shareholders, this deal makes no sense. It makes sense for people like vendors who ended up with shares and would have something that is more like a bond since it will pay interest and they have no interest (or limited interest) in equity upside (ie they want to just get money).
Using .24 cents, its about 112 shares of SIAF for the preferred. So although you get a equity kicker on the backend of 15 shares, you are losing 112 shares to do it.
The conversion price is 1.00+, so at .24 cents, you are giving up .76 to pay for this option, so you breakeven at 1.76, which signals that they think the equity will be far higher/or someone taking this deal thinks the equity will be far higher.
If the dividend is 2.80/112 shares = 2.5% yield.
If you take this deal you basically converting into a bond like instrument with a equity kicker. But you are losing a lot of your equity upside since you are effectively losing shares (but get a dividend). The dividend is optional and determined by the board of directors, so its not guaranteed.
This deal makes no sense for a common investor who intended to get equity-like returns. You are giving up:
All appreciation until 1.76 a share (using .24 cent price)
You get 1 series G + potentially 15 shares, so you have 16 shares instead of 112
You get a 2.5% dividend potentially, but not guaranteed
You get 20 votes per share, but you are giving up 112 votes to get it.
Once again, this really make sense for people who ended up with siaf shares like vendors that really want a bond like instrument with some limited upside. I don't think this applies to most people on this board.
The probable expectations is the soak up all the shares they issued last year for a low cost (2.5%) since the majority of people who got paid in shares are stuck (since the were issued at .55 for payment and we haven't traded near that in awhile).
If he can soak up the shares, then the reverse of what happened before will happen, shares will rise since the people with collateral shares will no longer be there and it will mostly be normal share holders. Plus, the sell wall at .55 that would be there would be gone (since all those vendors would be made whole at .55 if they are still holding shares).
This is targeted at vendors that have shares, and if it works it would lift the stock price since these sellers would be gone.
My best guess is that these shares would NOT get the TRW dividend for several reasons, one as mentioned above this is to get rid of dilution. Second, in the last release it talked about "corporate exercises" to take places before issuing TRW shares, this is to soak up those shares so the remaining common get the TRW shares they were supposed to get in the first place. Lastly, vendors don't want TRW shares they want money, so it wouldn't make sense because this is targeted at them.
So, logically speaking these should NOT have TRW attached to them, but then again SIAF has never been logical. But the good news is for us common holders if it goes thru we will hopefully get reverse diluted and some of our TRW and book value back.
At least it appears he is trying to repair the equity which is a good sign.
its not the assets that matter, its what those assets return. Plus, you also have A-shares so a management that can do whatever it wants and is totally unaccountable.
I have held off on investing in any companies with dual class share classes from lessons with this company, because when things turn south you are really beholding to the people who control the company and their interest may not be aligned with you.
To be fair, the assets returns are ridiculously low also, I think it was low single digit.
Everyone knows everything about SIAF is ridiculous, including last year when they cancelled the share dividend and the cash dividend.
well, Solomon did issue all those shares at 55 cents and we are 18 cents so it was net non-dilutive if he can buy them back under 55 cents.
But as of now, we got a good deal paying off debt with siaf shares at 55 cents. Of course, that maybe why its at 18 cents!
maybe he can pay debt with 18 cent shares and drive the price down to 9 cents,
creating shareholder value all day long
This stock is dead until management decides to save it. Whether thats buybacks, dividend, etc it has such blown credibility even on good news I don't see how it can hold its gains.
To be fair, management killed the stock as well.
We might hear some good news, but no one will believe it until action happens.
Maybe they could do a special dividend and announce the ex-date on the call.
The could announce a buyback but unless they buyback not much will happen.
with lottery tickets you could win
Its pretty clear Solomon needs to get rid of his A-shares, for the benefit of everyone -- the company/employees, shareholder, himself, etc.
If a company has EPS of 40 cents and is trading at 17 cents, it can be no other way.
Then the company can be investable, and the Board of Directors can appoint Solomon if he is doing a good job (or oust him if not).
No one wants to invest with the current structure, which suggests that that people don't believe they will see a return on their investment.
The worst part of all this is if Solomon were to let go, he might get surrounded by people who help him learn what he is doing wrong and become successful.
He has created a uninvestable company.
What better return on capital than buying back siaf shares? If you can buy for .17 cents and its EPS'ing at 37 cents (adjusting for full dilution and collateral shares) there is no better investment, you get your money back in 6 months.
price of the stock has gone up, SIAF must be having an emergency BOD meeting to determine how to react to destroy shareholder value.
I'm sure Solomon can't stand this happening on his watch.
What a great management team we have, leaving no stone unturned in its quest to get the share price to go down.
What can SIAF do to prove its not a fraud (because it looks like it), besides the obvious like pay dividends of stock or cash, because it didn't do that. (even worse, it announced and didn't follow through).
So at this point, I'm wondering what I own because I thought it was real. But how can SIAF a "profitable" company that is defaulting on loans prove its not a fraud at this point.
It certainly looks fraudy having announced and then called stock + cash dividends, while defaulting on a loan. Like who issues a dividend when you can't even pay a lender? A fraud would make sense to keep PPS to dump shares [like zero or mark would say].
But itdidn't act like a fraud (unless the accounting was fake too, and the ABC loan, etc), and if its stlll fraudy why keep going the equity has been wiped out.
yeah why I said it doesn't make sense. Why do it now at 75+? Maybe he wants it for his kids.
I think jyoo positioned Solomon as seduced by his delusions of grandeur, so it could always be that too but unlikely, just because the story is so ridiculous at this point.
Like, the theory is that even if Solomon had $1 million right now, he would immediately put it into TRW and not pay ECAB or any SIAF bills, and make it a A/R on SIAF's books.
and SIAF would pay its bills with shares.
at 2% of book
Do you think Garrett is liable because of his communications? He obviously is in the USA and has assets so he would be a more likely target than SIAF at this point.
But I would hope not since at least he has some insight of whats going on that he shared on the board/Emptyone.
Like as long as he didn't have material info, I don't think he is liable although some of his communication did seem to induce people into thinking not to sue SIAF/that it was going to be ok.
and what do we care what RealDutch thinks, even if his analysis is correct what difference does it make if we never seen any of the money.
This company is so too ridiculous to be a fraud, but its too ridiculous to be legit.
What is this? Solomon can't be arrested for fraud in China, China doesn't require legal #s be reported to the SEC/USA. So he has no risk there.
Maybe he recapitalizes and ends up owning it all in the end. Of course, Solomon thinks he's the victim in all this (as most losers do).
he'll blame Garrett, or ECAB, or whoever for "tricking" him into business dealings or whatever.
Handlamera,
Looks like there is a lot of buying going on today like you always say. Just curious what our resident pumper is thinking? Buying more because there is "blood in the streets"?
Confidence is low, thats all?
Bought a few more today right
Do you think this was a fraud in the "China Hustle" OR CGA way in that assets are vastly overstated?
I don't think its an extreme fraud in the way Zero says, but clearly something is very wrong here.
The odd thing is that Solomon had put in $2million of his own money (which he got paid back) at zero interest. (Which he hasn't done again).
Unless the finances are totally fraudulent, why would someone do this? He didn't take interest so it looked like he was trying to do right for the company and shareholders.
I'm not sure why people keep blindly believing this company but we have:
no TRW Dividend
no Dividend
Notice from ECAB for default
nearly 100% share dilution.
And this is a company that is "profitable" and has hundreds of millions in assets.
So the ? is what is the lesson here? Unless zero/mark are correct and its a full on fraud, but then Garrett would be taken for millions (he bought at $1 early this year).
It seems like its just a mismanaged low cashflow situation, but its so ridiculous with the cancelled TRW Dividend, hidden dilution, cancel cash dividend, lawsuit from ECAB but it HAS paid a dividend in the past (frauds dont do that).
Like, how can this be so ridiculous, only way it makes sense is its a fraud or fraudlike (significant assets faked) but then why pay a dividend in the past, or get loans from ABC (Agri bank of china, legit lender) etc. why would Solomon put in $2million of his own money at zero interest?
Even if it succeeds we may end up with nothing because if extreme dilution. The next step is the next AS share raise would should not surprise anyone (it would be a surprise if it doesn't because what has this company done that didn't hurt shareholders)
Just trying to understand what even happened it behaves like a fraud, but then does actions like a non fraud.
Maybe it always was fraud(lite) in the sense of overstating assets.
I mean even the meat business, geez. Like when it doesn't work we lose, when it "works" like TRW we lose.
Just trying to learn so I don't make the same mistake twice. I hope the lesson is don't invest in emerging markets because they are all fraudy because that sorta sad and racist, even if its true.
finally, speaking of profits if its a shell game what % of the profits are real and what % are just loaded into a A/R that will never be collected. You can report a billion in profits if you sell to companies (TRW) that will never pay.
Luckily I stopped buying very early this year when dilution news came out (after the fact). But I still got stung bad as I averaged down all last year at much higher prices.
Of course if its ultimately zero it doesn't matter if I bought at 25 cents.
how come all the crazy skeptics that live on this board arent commenting on the damage assessments of the fake assets?
will the hurricane damage be blamed for cancelling the dividend or delaying trw more did the reaffirm dividend and trw distrivution?
in light of the call today,
I would like to request siaf management
lower me into my grave
so they can let me down one last time
with the dividend cost the company should buy back it's own shares rather than expanding. at least until stock price is higher.
I hope so. I was going to load the boat but I dont like how management treats or communicates with shareholders. Its probably going to be an excellent buy, I just dont add to my losers and by losers I mean book value and my triway share is probably cut in half. that being said at 30 cents ur odds of success r way skewed better.
hope this works out for all of us!
it's hard to pass, I'm adding other stuff that is also good value but I added all last year and got smoked by management
siaf could succeed and we all lose, via dilution.
good thing were profitable.
well, if they keep diluting eventually book value with be .30 and we will trade at 1x book. Book value doesn't mean anything if the share count is highly dilutive.
How can you determine what you think fair value is when you don't know what the outstanding count will be by the end of the year/next year.
that is sad
the dilution is worse than that since I believe there is less collateral than at start of year.
that's great. how many diluted shares did u think there would be now, end of year and next year.
I didn't think a profitable company would dilute me by almost 80%
thanks
My OPINION is that it is impossible to value the shares and there is substantial risk because we have dishonest management.
For someone to buy, they have to think it will go up and they will make money, traditionally that means:
They have an estimate of what the earnings will be, and what the multiple they will trade at, and discount to present.
They have an idea of what dilution would look like over time to calculate the fair value.
They can calculate actual amount of dividend shares, etc (such as TRW) because they know how approximately how many shares will be outstanding on ex-div date.
On a face value, it is of course obvious that the shares are a great buy. But that has been the case for quite some time, and no one thought we would be diluting almost 100% as a "profitable" company, or waiting years for our TRW-Dividend.
And management and IR are poor communicators; so you can't get answers. Then you have to decide if you trust the answers.
TRW may do very well, I just don't know if I will participate and if I do by how much. I have lost almost 1/2 of book value just this year. [and this was revealed in hindsight].
To me it looks like a venus flytrap, and we are the bugs. They keep offering all these sweet deals to buy stock only to digest or siphon off our capital.
effectively the same, but it could be they are settling for $3 and the TRW shares are a kicker or settlement for fees or something else.
In the end it doesn't really matter 2.74 or 3 when we are trading at .30 cents.
I stopped buying shares, but its curious that TRW is doing well will I benefit from it? Ie will I get diluted away before I get my TRW shares?
I hope they can afford the dividend as it gets more expensive issuing all these shares (or maybe its not really happening).
I can't believe they can issue shares while affirming a dividend when the share count seems to be 2x (excluding collateral).
Not sure why this company is so difficult, it goes down on anything and never goes up, down on USA beef imports, down on USA Tariffs.
Stock is so heavy, obviously answer is all the newly issued shares are getting dumped.
-mp
how will siaf pay the dividend with all these new shares? amazing the dilution of a profitable company I think we are at about 80% excluding the collateral shares?
why doesn't the company communicate or give guidance regarding this?
and finally it seems like they are trying to provoke a lawsuit if they dilute away existing equity holders.
plus the trw div is also diluted if it happens like the cash div
It reports a profit, but doesn't have cash because its tied up in other things like assets.
But then it writes down assets like it did last year.
When you say "the make a profit" most people think that means they made money that is in the bank.
Similarly, they could be cash flow positive and losing money.
in the long run, it all lines up.
I'd consider profit if they are retaining cash, aren't diluting at 2% of book, and basically doing stuff truly profitable companies do.
it would seem obviously they should announce when they are done diluting, i think it would be very positive. but they are horrible at communicating so who knows.
what is the O/S excluding collateral shares, around 35m now?
I think last year it was around 19.3 so we have 81% increase in shares I believe.
Obviously, we are hoping the dilution stops but does anyone know when or what the targeted OS is?
There is no communication as to when it will stop or what they think it will cap at, I know 50m is authorized shares but Solomon can raise that.
so if there are excuses this doesn't get done at that point will u start holding management responsible?
this increasingly looks like a fraudulent company, not saying fraud outright but maybe zerohedge has some merit. Other than the people blinded by the siaf magic, it makes no sense how they operate this company if there is actual cash and real assets. Even if the assets are not worth book, you would think they could get loan versus diluting at 2% of book? TRW doesn't have money, siaf doesn't have money. Tons of assets that are unable to be collateralized into any form of cash (or they are encumbered). But its hard to believe a company with this much now has to beg borrow whatever for $5 million. Its all so ridiculous. I went in big last year and when you see the garrett deal, ecab, etc its just crazy because you'd think there was no way to lose money. But here we are diluting like crazy, at a $12m market cap, for a company this size.
What would be the obvious answer if I told you this about another company you didn't own?
SIAF have eps but never any cash, just gets worse. Diluting at a $12m market cap.
Just didn't think any of that was possible, like a company with $600m in assets is going to dilute at $12m market cap?? and yet we have EPS and profitable?
I stand corrected, they changed this then. It was that the dividends had to be returned upon repayment of the loans. This is positive in the sense that if they issue a lot of collateral shares they don't have to issue dividends to them.
Thanks for pointing that out jyoo
agreed. The authorized shares are currently at 50m, so thats the top if they don't raise it again.