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The terms of Red Oak's preferred shares provide that they vote along with the common with voting power equivalent to 30% of the common. They already have 30% voting power for any record date after they acquired their preferred shares.
Although I oppose the increase in authorized shares, it's only a matter of time until they get an increase if they want one. They just need to change the record date to a date after Red Oak acquired its shares so it can vote its 30% for the increase. Since they moved the vote date but kept the same record date, I'm guessing they were at least somewhat close to having enough votes anyway and were hoping getting Red Oak into the company would cause enough shareholders to change their votes to "yes". They may also be calling on larger shareholders to sway their votes. In any case, I think its only a matter of time before they get an increase approved although maybe with Red Oak's input they may ask for a smaller amount of shares next time if this vote fails.
A company's stock should only be used as M&A currency if its well valued by the market--not beaten down as CBAI's stock has been for years. To issue it for an acquisition now is just another form of dilution to existing shareholders. Well run companies don't issue shares when their share price is down. Let Red Oak manage the CBAI's stock price back up to a more reasonable level for a least a few quarters before they ask for a 2 billion share blank check.
In fact, it would be best for us other shareholders if Red Oak isn't able to convert its preferred shares to common--at least for now. Their preferred shares really aren't very saleable unless someone wants to step into their position of controlling a little company with a checkered history, still significant debt load and an uncertain operating future.
If the number of authorized shares is increased and Red Oak converts its preferred to common, guess what will happen if the going gets tough? They'll start dumping and drive a renewed downward spiral in the stock price. Let's don't give them that option. If the authorized share count isn't increased and Red Oak can't convert to common, they have no choice if the going gets tough but to continue to work hard to manage the company to a good place. On the other hand, if the operating results and share price improve significantly over the next few quarters and they come back and propose the authorized share increase, they have made a much better case for it. I don't see how the rest of us shareholders benefit in any way by approving a share price increase now.
Everybody very quiet today...
CCCL--Any thoughts as to the recent bounce? Perhaps somebody close to the company getting it up over $1 and back into NASDAQ compliance?
GV I'm surprised no posts here as has really been running. My Dec 2.50 calls probably won't mske it into the money
GV--Been on fire lately even on some down days. Any theories or news?
GV--Been on fire late
GV--Been on fire late
Skillz--Now might be a good time to invest in some of those MLP energy funds that pay high dividends? One question would be whether their current dividend would hold. General thoughts? Any specific suggestions?
CCCL tanking
CCCL--Good volume and upward momentum again today after impressive volume on Friday. Somebody likes it.
CCCL--Surging on volume.
CCCL--Posted delayed Q1 results. Revs up 40% YOY on improving volume and average selling price. Not quite profitable.
CCCL--I'm hoping they started trading before releasing Q1 and Q2 numbers because those results will buoy the stock. We'll see.
CCCL--I have a large position but won't be selling pending reporting of more recent Qs.
CCCL--Any guesses on how it will trade tomorrow? Interesting that they let it resume trading before re/filing Q1 and Q2 numbers.
OT--I'm a premium subscriber to Ihub but get all these banner adds and annoying pop ups. Is there an Ihub setting I can change to eliminate these? I thought no ads was a benefit of being a premium subscriber.
HIMX--Getting manhandled by shorts today
GV--I'm long Dec calls but am getting cynical about these guidance comments which are directionally encouraging but impossible to quantify. I'm surprised the CEO has enough credibility left to move the market like he did today with that statement. I guess at least it bodes well for the top line which is half the story.
VIX--Clearly bottoming out. Will it poke along the bottom for another 1-2 years like it did in 2005 and 2006?
GV--My Dec $2.50 calls which I bought for .35 before earnings somehow got magically marked up to .40 today on no volume in my etrade account. Very odd.
LIWA--I'm (totally) guessing that giving up ownership was part of an overall settlement with the local authorities who apparently were chasing him around. Although I'm not optimistic about the future, I think it's a positive that the company is "under new management" and gives it a better chance to start trading again.
LIWA--Per this filing looks like there's a new controlling shareholder:
On May 14, 2014, Ms. Daphne Huang, Chief Financial Officer of Lihua International, Inc. (the "Company"), received a copy of an executed stock purchase agreement (the "Agreement"), dated May 11, 2014, between Magnify Wealth Enterprises Limited, a BVI company ("Magnify Wealth") and Power Apex Holdings Limited, a BVI company ("Power Apex"). Pursuant to the Agreement, Magnify Wealth sold 13,195,000 shares of common stock of the Company (the "Shares") in a private transaction to Power Apex. The Shares represent approximately 44% of the total share ownership of the Company. Magnify Wealth's share ownership was reduced to 155,000 shares of common stock of the Company after the sale. Mr. Zhu, the Company's former Chairman, CEO and President, is the sole director and sole officer of Magnify Wealth. The shareholders of Magnify Wealth are Mr. Chu Fu Ho and Europe EDC.
Based upon information provided to the Company, Wuxi Industry Development Group Co., Ltd. ("WXIDG") is an indirect substantial shareholder of Power Apex. WXIDG is a state-owned enterprise of the People's Republic of China, which was established by the Wuxi City government in 2008. According to information provided to the Company by WXIDG and publicly available information, as of the end of 2013 WXIDG had total assets of approximately RMB 29.4 billion (~$4.7 billion), net assets of approximately RMB 15.5 billion (~$2.5 billion), and was ranked number 210 among the top 500 companies in China.
GV--Bought Dec $2.50 calls for .35. We'll see how that goes.
CCCL--So at least not the worst cast scenario although may take 90 days for stock to trade. Q4 revenues down sequentially from $55 million to $36 million so not a pretty picture there.
APWC--Filed this morning. Earned .42 in '13 vs .70 in '12. In '13 they had fx losses of .26 and copper inventory write downs of .39 so eps massively affected by those two items essentially beyond their control. Despite falling copper prices revs were almost same YOY so unit sales must have increased. Receivables remained constant YOY and they generated good cash flow and paid down debt some. Not very exciting--but better than LIWA!
CCCL--What I don't get is why they didn't file for extension to file financials with SEC. They've gone completely dark in terms of any SH communication or even SEC filings. Even when there's massive fraud the Board usually will issue some PR like "we're getting to the bottom of this". Nothing here at all since they announced their quarterly call then abruptly cancelled it with no explanation. If there is an ongoing SEC investigation, usually that is disclosed. It feels like they just went into hiding. Also, they had two longstanding independent directors resign a few months back which was a red flag--but then one of them subsequently agreed to stay on. Why would she stay on if the sh*t was about to hit the fan? Was she completely clueless? Weird.
CCCL--Not trading so obviously halted, but where do you see that halt announcement? Was it pushed through to you?
LIWA--While that statement from the Board isn't an admission, it certainly implies the substance of the allegations could be true.
SSKILLZ1--While none of us can really be totally objective, IMO you're the very best at not getting attached to your picks and freely acknowledging when your picks don't perform as you expect. I think you're an excellent model of a non-emotional, disciplined investor, and I appreciate how you show up on this board.
LIWA--If it's a fraud, it's the slickest fraud of all the China's IMO. Their reporting is very tight and professional and made them look more credible to me. Recently, they missed their guidance which made them seem more "real". I figured one of the forensic short guys had already spied on their operations and not found anything worth reporting on. The only red flag I could see were the high margins which seemed unrealistic for an industrial business. I have 30 August '16 $5 calls for which I paid .70 so only have $2100 at risk. I do have shares in my sister's account (sorry sis!).
LIWA--Trading resumed. Didn't have the guts to pull the trigger on May 2.50 calls although these usually rebound at least temporarily when management responds to allegations.
CCCL--No idea whether they'll file numbers by tomorrow or extend. Why do I feel like I'm on trial for murder and waiting for the jury's decision? New lows don't exactly instill confidence.
CCCL--When are they required to file Q1 if they're NASDAQ listed?
Seems like most of the China small caps are getting murdered today. There was another article in the WSJ about residential overbuilding in 3rd and 4th tier cities which probably didn't help the basic materials/infrastructure stocks.
CCCL--Do they need to file today to be timely?
Now I feel better. At least my losers are in good company.
LIWA--Trading at 52 week lows. Maybe a reflection of downward trend in copper prices which could lower revenues and squeeze margins. Still seems very cheap here in the $4.60s given their balance sheet and historic ability to execute consistently.
No posts. Hmmmmm. Smells like a bunch of quiet sellers.