I contacted New Energy's IR company and had a very helpful email exchange with John Mattio, Sr. VP with HC International. On my end, I brought up the increase in short interest and that it didn’t seem to be based on anything other than the fact that New Energy is a Chinese company which was created through a RTO (as all of us know, China RTOs have been bashed in the press recently – huge negative sentiment). I also brought up that it appears there is a lack of significant institutional interest in the company (no Schedule 13G/ D filings), and questioned whether the company had any plans of how they might better be able to increase shareholder value.
The following is his response:
The Company is due to provide updates to investors on its sales efforts of Anytone products in China and is also considering other measures to regain investor confidence. Your views on the China RTO sector are well founded and we are witnessing a reshuffling of investor dollars between, and sometimes away, from Chinese RTOs in a number of sectors. Value investors including institutions are taking notice of NEWN at these levels and Mr. Jack Yu, CEO, Ken Lin and I are in frequent contact with institutional investors who are now showing more interest in companies that trade at 5x trailing and 4x forward. Our job as the IR firm is to do just that, connect NEWN with institutions to balance the retail shareholder base with a foundation of institutional holders.
Your suggestion on a stock buy-back has also been discussed with the Chairman and the board recently.
