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New Solomon has sold another 1,000,000 shares at 5.75...filing today.
Up almost a dollar today...something's brewing.
butter,
CEO Cast and Briefing works together a lot. No doubt CEO Cast is feeling burnt as do thier partners and peers. Not sure what to make of this transaction yet. Not sure if its as bad as a Ex IR firm says it is but the only way it can be good is if they have a real fund buying those shares in a fixed price transaction. Then we may get a floor from it. But that is IF the glass is 3/4 full!
This is how CEOcast.com summarized it in their weekly email...
China Energy Savings Technology, Inc. (NASDAQ: CESV), a leading provider of energy saving products in China, said that its chairman and chief executive Sun Li has resigned to pursue his own business and personal interests and will be replaced by Kwun Luen Siu, effective immediately. Note that Mr. Li is the company’s largest shareholder by far, and has filed to sell approximately 6 million shares of his common stock in a $50 million offering of securities. With the offering likely to come at a significant discount, we would suggest investors avoid the stock if and until it is completed. Shares ended the week at $7.02, down 89 cents.
Friday CESV sharp drop was due to Briefing.com announcement of that 10 million shares secondary offering. There were 100K sh. dumped in that one minute
10 million shares are Common stocks, while $50 million is for Preferred stocks, which already secured some private investors.
Plus, 10 million shares will NOT be offered in short time. It will be over a length of time.
$50 million got from private investors might be used for buying out other companies. So this should not be solely considered as dilution
And next year, the earning per share for CESV will be >$1.7 per share.
Like you said...the market always overdoes things. I'll probably wait til it gets closer to $4.
Beigledog - That is a very interesting thought. A 10 million offering , and a 50 million line of credit figures out to about $5 a share. Are you assuming that the "institutional shares" might well be collateral for the use of the funds?
Am interested--are you thinking of buying again here--at say a price in the $5 area? Waitedg
My thoughts are...
And I'll probably expand on this later, but,
I think that the 10,000,000 may just happen to go to some institutions. I think that that is where the 50,000,000 number is coming from. After the Sun Li selling, this will be (at best) a $5 stock. If institutions are in fact the buyers of the 10,000,000 shares, it will prove the new CEO is the man he says he is.
Just a quick thought.
Our one analyst projected before the announced offerings earnings per share of 1.71 for this fiscal year. Factor in a .7177 dilution and this would reduce this to 1.23--an 18% increase over this past year's 1.04.
And the company now will have the working capital of 10,000,000 X what they get for the shares--plus they have the valuable $50,000,000 revolving line of credit the new CEO has brought in.
Again, agree with you Coffee, that this is a year for base building. A yearfrom now we might well have the combination of explosive earnings, tremendous increase in PE ratio--and the absense of much dilution.
A very special and exciting opportunity for the patient investor. I might add that we on this board should watch insider trading carefully. "Buy when they buy and sell when they sell" might make very good sense here. Also we should watch and try to track the movement of the 6,050,000 shares. When they have all been sold, the dampening of the price should be reduced. Waitedg
Coffee221 - I pretty much agree with you. I dig the following out of the two offerings:
1. At present there are 25,421,855 shares outstanding, with 13,805,134 held by the company--or 54.3%
2. The present float is but 11,616,721 shares or 45.7%
3. When the 10,000,000 shares get filtered into the market, the dilution will increase us to 35,421,855 shares--or a dilution to .7177 or 28.23%
4. The 6,050,000 shares of insider sales will decrease the insider percentage from 54.3% to 30.5% based on current 25.42 million shares outstanding.
5. When the full dilution of the additional 10,000,000 shares new offering gets filtered in, insiders should then own 7,755, 134 shares out of a total of 35,421,855 or 21.9% --down from present 54.3%
Am interested in yours and Beigel's take on the effect of all this. Need to think it through. It would appear the stock might be depressed for a considerable time--yet with good earnings really turning this into a value stock as you suggest.
Could see insiders selling into good news. It will be important to somehow track the reduction of insder sales as time goes on.
The stock was consolidating around the $8 level. A .7177 dilution ($8 X .7177) takes us to a $5.75 level.
Did either of you pick up when the 10,000,000 offering will go into effect--also the 6,050,000 offering?
Plan to leearn as I go along here--but definitely will be doing my "bottom fishing" as time goes by. Waitedg
None of this is really surprising. Sun Li had way too many shares and now this development makes it clear that percentage will come down, which is a good thing in the long run. Also, they were planning a large PP for some time. I'm actually surprised it is not bigger.
In a nut shell, the flood gates have opened, which many expected. The big boys can now buy as much as they want and cheap.
Based on all the developments, it is probably going to take a year to consolidate all the share issuing. I'm expecting the general market to stink it up in 2006 so perhaps it is just as well. Meanwhile, CESV will just keep cranking out eye-popping numbers and more and more value investors will flock here. The next year is all about building a base for lift-off, no pain no gain. Just my IMHO.
This will soon be a $5 stock again.
This is just plain evil!
Now I'm once again worried about that word that someone might use for CESV (S-C-A-M)
Now this should easily take it to 6 bucks....look out below!!
16 million shares about hit the market. 10 million of them will be added to the OS.
http://www.sec.gov/Archives/edgar/data/1119601/000114420406002050/v033511_s3.htm
http://www.sec.gov/Archives/edgar/data/1119601/000114420406002054/v033513_s3.htm
I really don't think that CESV is falling because of anything to do with CESV. I think it's more of the fact that the whole market is down 150 points. I wouldn't take anything from today's action. I think the stock has show some support the last few days though after the new CEO was announced though.
Beigle - As we are starting to drop like a bomb again--any ideas how low low will be? My hunch is some resistance in the low 6's--but as this stock has a tendency for the overkill, would not be surprised if went down into the upper 5 area.
I can see tentatively buying into a "delay in earnings" report--perhaps 4 or 5 days into it. Good to be standing on the sidelines watching. Waitedg
I'm almost sure there will be a delay again. With a new CEO at the helm, I doubt they will be able to get things done on time. Plus, it is more of the exception, than the rule that they file on time. It is typical of them to file the delayed filing notice and then file it a few days later.
Beigledog - If we don't hold here--then we could be heading for 6. Imagine the average investor feels very different than you and I might. The Top Dog of a supposedly challenging growing business decides to sell a bundle and start a new business.
With all the past uncertainties of CESV this certainly can create a considerable market oversell. From earlier years I like to get into a stock about 2 1/2 weeks before earnings will be announced--particularly if the possibility of positive earnings surprises are at stake. What is your thinking as to the odds of our getting earnings on time around February 15th? Or do you think there will be a delay again? Waitedg
Whoa...I've been in a meeting this afternoon, but I didn't expect it to fall this hard this fast. I'd probably need to do some more analysis of the situation and I need to find out if the company would be willing to take a direct phone call from me (because they definitely wouldn't before!) If I could get through to somebody, then my chances of buying are pretty decent.
Beigle--If you were getting interested around 7.50, your appetite must be getting whetted about now. How low is low? When we saw that $4 low last year, we know the market over responds to perceived bad news. As the sayng goes, "Don't get in the way of a falling knife."
Give the word, and I will likely try to get in a few cents below you this time!!! But am thinking perhaps down to 6 here.!!! Waitedg.
Technically it doesn't dilute the shares by Sun Li selling...and it was 2.2 milllion shares at $8.
All of this selling comes at an interesting time, since during the middle of the summer just after the stock split was announced I was calling the IR telling him that a split doesn't change the ability of mutual funds to buy the stock. It was all news to him and apparently to the company. I suggested two ways for funds to be able to buy CESV shares and take away some of the illiquidity of the stock...1) Either insiders had to sell or 2) They needed to issue more freely-tradable stock.
They went with #1, which doesn't look good in real time...and never will, but it's good long term for the company.
Beigle - Sun Li sold 2,000,000 shares at $8 recently. Isn't that a bid shady in that he knew that the new offering was in the wind that would dilute the shares 31%--if I calculate right. Of course, this is working capital.
Rigatoni - if you are reading these posts, would appreciate also hearing your take on the current CESV situation. Thanks, Waitedg
I'm pretty suprised by the price action today...I actually kind of like the news. With Sun Li out, I think that this gives the company a new perspective. Under Sun Li, we had the problem of the shady reverse merger, hopefully the new guy will get all of the news out in the open and I might just be a buyer again.
Now that the gap has been filled, it might not be a bad strategy to pick up a small position here.
Disclaimer: I have not and probably will not be buying shares for a while in CESV, everything is just my opinion.
China Energy Savings Secures $50 Million Financing For New Ventures
Tuesday January 17, 9:01 am ET
HONG KONG, Jan. 17 /Xinhua-PRNewswire/ -- China Energy Savings Technology, Inc. (Nasdaq: CESV - News), a leading provider of energy saving products in China, announced today that it signed an underwriting agreement with a full service investment financial group providing a broad range of securities related services on January 17, 2006 for raising $50 million through a private placement of Preferred Stock. The funds will be used to finance acquisitions of new infrastructure and energy ventures. The S3 registration will be filed with the financing placement. Mr Kwun-Luen Siu, the newly appointed Chairman and Chief Executive Officer of the Company, stated, "We are extremely pleased to announce this proposed offering. This financing will allow us to more aggressively pursue opportunities that we believe will drive our future growth plan. We are extremely excited with the financial group who participated in this financing as the underwriter."
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About China Energy Savings Technology
China Energy Savings Technology, Inc., through its ownership interest in Starway Management Limited engages in the development, manufacture, sale, and distribution of energy-saving products for use in commercial and industrial settings in the People's Republic of China. According to test reports by various PRC authorities including the National Center of Supervision & Inspection on Electric Light Source Quality (Shanghai) issued in September 2002, Shenzhen Academy of Metrology & Quality Inspection issued in December 2002 and approved by the State Quality Supervision Inspection Department, the energy saving products of Starway's subsidiaries may provide energy saving rates ranging from approximately 25% to 45%. The energy saving projects conducted by Starway's subsidiaries mostly relate to public or street lighting systems, government administration units, shopping malls, supermarkets, restaurants, factories and oil fields, etc. There are small and large-scaled projects: the small-scaled projects relate to restaurants, shops, small arcades, offices and households through the sale of equipment, and the large- scaled projects relate to large shopping malls, supermarkets, factories and public bodies through the provision and installation of equipment over a term usually extended for years.
They now have it on Yahoo Finance...
China Energy Savings Appoints New Chairman and Chief Executive Officer
Tuesday January 17, 9:00 am ET
HONG KONG, Jan. 17 /Xinhua-PRNewswire/ -- China Energy Savings Technology, Inc. (Nasdaq: CESV - News), a leading provider of energy saving products in China, announced today that Sun Li has resigned as Director to pursue his own business and personal interests and that the position has been filled by Kwun Luen Siu, effective immediately. Sun Li remains the largest shareholder of the Company after leaving the Board.
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Mr Siu is referred by Sun Li and reviewed by the Board of Directors of the Company before he was appointed. Commenting on the change in management, the Board is pleased to have Mr Siu assume the role as Chairman and Chief Executive Officer, who has an impressive and successful background in the financial sector having served as the Responsible Director of Forex, Futures and Securities under Securities and Futures Commission of Hong Kong, the Chairman of Supervisory Committee of the Chinese Gold and Silver Exchange Society of Hong Kong, and Managing Director of Dashin Group in Hong Kong. The Board further believes that Mr Siu will bring extensive financial expertise to the Company, which is key to the future growth of the Company. Mr Siu also has a higher proficiency of English than Sun Li.
Prior to joining the board, Mr Siu introduced an investment financial group to the Company to underwrite up to $50 million to fund the development of their new alternative energy technologies, new markets and potential acquisitions. For more information of this transaction, please refer to another piece of company news of today.
The Board thanks Sun Li for his contribution during his tenure and wishes him every success in his own business.
About China Energy Savings Technology
China Energy Savings Technology, Inc., through its ownership interest in Starway Management Limited engages in the development, manufacture, sale, and distribution of energy-saving products for use in commercial and industrial settings in the People's Republic of China. According to test reports by various PRC authorities including the National Center of Supervision & Inspection on Electric Light Source Quality (Shanghai) issued in September 2002, Shenzhen Academy of Metrology & Quality Inspection issued in December 2002 and approved by the State Quality Supervision Inspection Department, the energy saving products of Starway's subsidiaries may provide energy saving rates ranging from approximately 25% to 45%. The energy saving projects conducted by Starway's subsidiaries mostly relate to public or street lighting systems, government administration units, shopping malls, supermarkets, restaurants, factories and oil fields, etc. There are small and large-scaled projects: the small-scaled projects relate to restaurants, shops, small arcades, offices and households through the sale of equipment, and the large- scaled projects relate to large shopping malls, supermarkets, factories and public bodies through the provision and installation of equipment over a term usually extended for years.
I just got 3 HUGE blurbs in my email about CESV...
These are in order...
-DJ China Energy Savings Appoints New Chairman And Chief Executive Officer
-DJ China Energy Tech Names Kwun Luen Siu Chmn, CEO
-DJ China Energy Savings Secures $50 M Financing For New Ventures
Thanks beigle, sounds about right. eom
I believe that with the extra 2.2 million shares the float would be 7,033,330 shares.
With the recent trades, what is the float now?
Item 3. Source and Amount of Funds or Other Consideration
On January 3, 2006, the Reporting Person sold 2,200,000 shares of the Issuer's common stock at a price of $8 per share.
didn't he already sell them.
I honestly do not know how this stock is hanging around 8 bucks! Sun Li, has registered to sell 2.2 million shares of CESV. I would think this thing would tank!
Which way are we going? I look at one chart and it looks down. The value is certainly here. The prospects are tremendous. The potential future p/E ratio has no way to go but up. Yet the investors give this one almost a no vote of confidence. Standing on the sidelines with much interest. Waitedg
Either way is ok with me. I have a gtc in to avg down in the low 7's. I'll re-evaluate my price if we get close.
Sold my position at 8.30 today. The chart can be read either way. A move above 8.50 would start an upward thrust. A fall back below 7.50 would take us down close to 7. My hunch is that we will be heading down--at least until near the end of January. Waitedg
CESV's been banging its head on 8.47/8.50 the last 3 days. Maybe this is the start of pushing thru that area
news out
Press Release Source: China Energy Savings Technology, Inc.
Dutton Associates Reiterates Strong Speculative Buy Rating: China Energy Savings: FY 2005 Revenues and Earnings Blow Through Our Estimates; Stock Up On Heavy Volume
Wednesday January 4, 9:00 am ET
EL DORADO HILLS, Calif., Jan. 4 /Xinhua-PRNewswire/ -- Dutton Associates issued a research note on China Energy Savings (Nasdaq: CESV - News) on December 22, 2005: The year-ended 9/30/05 results were detailed in their just released SEC Form 10-K. For the year ended 9/05, revenues increased 14% to $48.4 and net income for the year, increased 295% to $22.4 million while EPS were $1.04. The increased revenue and earnings for the fourth quarter and year-ended 9/30/05 are positive for China Energy. However, the Company wish to point out that the revenue increase of 14% to $48.4 million was due to the increase in the sale of profit-sharing energy-savings contracts that was $23.0 million in the year ended 9/30/05, compared with approximately $10.0 million in the year ended 9/30/04. Other aspects of the release have also been reviewed. At this time the Company reiterates its Strong Speculative Buy Rating and price target of $13.25. The Company is in the process of preparing an Update Research Report that will review our rating and income model.
My hunch--we are heading south short term. Not surprised if we hit the low 7 area. Why? We hit 4 when when we already had .62 earned for 3 quarters. I think the rise will start about 3 weeks before the 1st Q earnings are to be announced--roughly aabout the last week of January. Anyway--going to just watch for the next couple of weeks.
I'd say that with the light volume yesterday and today, I still say that we're going to fill that gap. The volume has been light so it's not convincing me that it's going to stay up here. I think next week will be the better indicator on where we'll go short-term. I'd stay out.
Beigledog - What is your sense as regards the short term direction of CESV? Presently 8.28 as I write this. Waitedg
Watching the bounce also. At 1:30 still at 8.32--not too far off the peak. Will be interesting to me on what happens next week after tax loss selling is over. My 7.20 standing order now looks rediculously low. But would rather wait a bit to see if basing sets in
It looks like we're getting the bounce right now...CESV made it up to 8.47. Volume is decent...nothing outstanding but pretty good. I still wouldn't enter at this point though.
There is huge support at 7.60 with TDCM showing 170 on the bid. It's suprising to me because that would allow us to fill the gap from earnings day. We'll see how it goes down.
Overvalued? Do you mean undervalued?
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