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Something strange afoot. Stock seems to be creeping higher.
Imminent uplist. Resolution with Pope over converstion of RMB dollars. Or just the realization there is lots of upside such that no one wants to sell ???
I bet that all of those short shares have not covered yet. They expected this to go lower. But it's refusing.
I'm always skeptical, but still optimistic and hopeful.
Take a look on Yahoo. It appears to be real, very real.
Just hit the wires . . . Check this out.
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_J/threadview?m=tm&bn=31759&tid=8251&mid=8251&tof=3&frt=2
BigGreen, why was the post you responded deleted? What did it pertain to that made it so objectionable?
I listened to the call. And I found the summary to be linked here to be accurate, and believe it included the more important points. (It seems dialogue here is a lot more constructive to that witnessed on the Yahoo board, where people seem to be getting rather ornery.)
I was disappointed to not hear a more definite plan going forward, though the property expenditure does not concern me, as I feel that is likely to hold its value. In fact, if the Yuan is allowed to appreciate, it goes up in value in dollar terms, as does all the cash.
I get the sense that management is staying somewhat tight lipped intentionally. It seems likely that something is on the horizon. We will just have to wait and see how that unfolds.
I am not particularly concerned with Hongrui delay, as the projecions for this year were low, and they did affirm guidance, which I am inclined to believe, as one thing this company doesn't seem to do is blow smoke. It's the opposite in fact. And I think this call was extra measured because expected timelines given in the past have come and gone. They really do need a new COO, and if they hire one with the right experience base, it could really change the evolution of this company, including the speed.
The bottom line is that if the company can continue to maintain revenue levels, that this stock remains cheap, whether you bought it at $14, $9, or cheaper. People that don't recognize this do not appreciate the financial leverage that JGBO has over most of its peers. I am not aware of any that have so much cash, even if all the financial instruments are not converted. This will allow them to weather the storm.
I am also bummed that I did not sell at $14, or even $12, but hey, that's life in the stock market.
I did get the sense from the call that uplisting is more of a formality than anything, and I don't see anything getting in the way. Unlike other companies with complicated debt instruments, JGBO seems to be accounting for them properly. Heck, that's part of what's kept a lid on the stock.
It's worth noting that it's not like people are selling en masse. As we all know, there is usually a wide spread between bid and ask, and I think if lots of people really wanted out, the ask would have been dropping more aggressively. It really didn't. The real closing price yesterday should have been $9.25, so we dropped about 6%. BSPM dropped way more, and they just put out a pretty good report.
Finally, like someone else commented, this just became a very long term holding for me. It's clear that the turn around is going to take a little longer than I expected. Then again, the company did always say this was the transitional year, and there is no reason to disbelieve that the company can put the cash to work to buy prescription drugs that they can already manufacture in the current facility. And at least one should be approved by the end of the fiscal year, to fill any void as the other drugs mature.
More than anything, I am dismayed by the price action. This response seems disproportionate to what has happened. If people are concerned about the declaration of default by default, they are making way too much of it. It will only increase the interest for the last 6 months of last year, when the company provide shares instead of interest in US dollars.
Thank you for everyone's thoughts. This is a good group. Have a nice weekend.
I will attempt to, but I will be commuting, so I will need to listen to it on a mobile.
It's just sort of a rough target, based more on cash flows, which is often how these pharma stocks are priced. But if they can get the eps up to $3 through accretive acquisitions, and get all the convertibles converted, and still hold around $20mm in cash, I think an assignment of a p/e of 10-15 would be fair, relative to peers. Or free cash flow of 50 million per year, would value the company at around 500 - 600 million, plus the cash. If that number adds up to 600 million, and you have around 15 million shares, that's a $40 stock as I see it.
This company will grow the earnings, the only issue is when. Investors are tiring of a lack of faster action, but as anyone who invests in Chinese companies knows, the Chinese are much more methodical than we are. They are building a company for years out, not next year. Thus the 17 million $ undertaking for more land use, that will probably cost another 8 million to build out.
I do not invest to flip stock; if that is my predilection, I choose highly volatile stocks that trade on greater volume. You can attain a 300% return flipping a stock like this if you are really lucky. Or you can just sit and wait patiently, and wait for your 300-400% return in a few years. Of course, more likely than not, you will end up down 25% at some point in time, but that's the price of investing in micros that rarely do what you expect, internally or externally (the market pricing).
Thankfully, over the last 2 days, I've managed to get my cost basis down well below $11, so I am only down about 10% now.
Short of awful news tomorrow, I expect the stock to start moving back up. Really good news could cause it to bounce, as there doesn't appear to be a lot of selling resistance at this level. I'm glad that we are getting rid of the momentum players, as I want none of that. I like a stock that is off the radar.
Does anyone view this as consequential? I hope that none of them have covered. But still, I am not sure it makes a difference, as that's not many shares.
Herbie, I arrived here a week ago, but I've been in this stock since the summer.
I am a long term holder. With the right moves, this stock could be over $40 in a year. I am more earnested in discussing the future.
I also own BSPM and RINO.
I hope that answers your questions.
BBB, with all of the fundamental issues that are in flux, the next move is not going to be known until it's begun in earnest, and it will be fundamentally driven, not technical. The CC on Friday could cause a dip, further consolidation or a nice bounce. (I tend to think the latter, as I believe management will shed further light on how they've been doing, and their explansion plan and pipeline progress.) I draw nothing from today, other than that selling has dried up at this level for now. Today was actually an up day, though paltry volume. The last trade of yesterday was a market order at the close for 1,000 shares, that propped the stock up about 5%. So today was a minor victory. But nothing to infer much from given the volume.
I too am a technical investor, and playing the $10 - $14 range was reasonably predictable, though some were expecting decent earnings and then an uplist, which would have derailed that pattern permanently.
Given the volume that this stock trades on, I think it's tough to contend otherwise.
Herbie, of course the uplist is important, but I don't understand your statement. It's not like many are buying in for the uplist now. And those that are holding can wait longer. There is nothing magical about April 15th that I know of, other than Pope's right to accelerate. But I don't believe that will happen. I tend to think that April 15th date will work out, but it if doesn't, I won't be selling necessarily, as I believe it will eventually happen, and I think the second half of the year will be reasonably strong.
BBB, why don't you talk about the perceived risks, and the fundamentals that underlie the technical warnings. This is what interests me. Usually, you can look back at the technicals and say, "ah, this is why the stock behaved this way." For me, it's not so clear. Not at all.
I am not giving you a hard time. At least I do not intend to. I am just trying to understand. You've been around long enough where I have to assume you don't keep coming back just because of the technicals. There are other stocks that are FAR easier to trade on technicals, in my opinion.
If they can pay to resolve the arbitration, I don't see how they can't pay the interest. If need be, I'd like to think Pope could somehow work out a way to be paid through other means, yuan reminibi. I. too, am inclined to believe that the uplist will occur. Nothing that has happened as of late should tarnish that likelihood. I don't see any funny play with the numbers. I have noticed other companies agreeing to similar deadlines in connection with their financing, though thet were initially agreed to in the agreement. The Nasdaq makes money when a company uplists, so there is every reason to approve it. I am wondering if the ability to pay has impact this as well; then again, many other companies have uplisted. Perhaps they had financings that kept dollars in the US to pay it. It's possible that could happen here, too, to pay off Pope and any other US liabilities. At the end of the day, I think Pope will accept shares to pay off the debt in any event, and this is partly a set up to compel the PRC to release the funds. But that's just a guess, and an idea that someone else brought up somewhere, I believe.
It is interesting that there is such little volume today. That's good in a sense. I wouldn't mind a little consolidation in the 9.60-10.00 zone.
Personally, what I would find most productive is talking about why the stock climbed and fell in the past rather than why someone did X, Y, or Z because of the technicals. This stock seems to have traded in a channel, without much rhyme or reason as to why. And the volume doesn't shed much light on things. Usually, the technicals tell me the fundamental story. That's not the case here, for me at least.
Have u thought about how the paid off the US arbitration in dollars. Not insignificant dollars. No more to pay the interest. It will get done. The agreement was to place pressure on the PRC. And I betcha it gets uplisted in the next 6 weeks. Get ready for curve balls. They are coming.
What are your thoughts on the CEO, Cabo Wabo? (LOL)
No sweat; I have the feet of an elephant.
I am a newbie, but zealous to learn more.
And please know, I was not calling names, and I apologized in case I bruised anyone's feelings. But I am hurting a little bit, as I got in at $12, on the last trip down from $14.50.
There is some good information here, for certain.
What are your takes on the CEO?
And no need to talk about the CFO, because I know everyone thinks she's hot. Where I live, there are tons of Asians, so she doesn't do much for me, though she seems competent enough, and her English is understandable. I think they would be well served by a more fluent, articulate English speaker, with a greater understanding of pharmacology, heading the meetings, but hey, I've listened to others that were merely translated, and that's even worse.
He may be a great guy, but I never care to hear "I told you so," unless a bunch of people were calling him a fool, and he is expressing vindictation.
Hindsight's 20/20, and if the quarter were good, and the uplist were already announced, we could easily be above $14. He made the right call, and I am glad he made money. I'll leave it at that.
Apologies to BBB.
Unless they are in this for the long run and want to help JGBO clean up the balance sheet, they would wait to convet, so they can earn interest in the meantime, until the stock pops.
Congrats to anyone who made a good trade, but there is no need to tell others, "I told you so." If you make money, that should bring the satisfaction. Pushing others, who have lost paper profits, lower serves no ones interests. At least it shouldn't.
I see we have an "I told you so" on board. I always find that productive, sort of like smearing my dogs nose in shit when she doesn't do what I want.
They have no right to do that; they can just accelerate and charge default interest for last payment. That's it. So don't worry about that. AND, if things are bad, they would not convert in any event, as they'd be hard pressed to unload a few million shares at $8 given the trading volume at this juncture. More likely, they'd need to sell via a secondary, to someone with confidence that it's going higher. In any event, they can't convert because of a default.
I promise that will be discussed at the CC, and you may be pleasantly surprised. I bet Pope knows, in connection with negotiating that letter agreement. Look, if all was lost, Pope would have accelerated the note, claimed default, and collected. But they didn't.
It's close if you consider restricted cash and accounts receiveable, I believe, assuming the warrants convert.
http://ih.advfn.com/p.php?pid=nmona&article=41674518&symbol=JGBO
They are affirming previous guidance.
Even if approved, I dont understand, so I dont know whether to read anything into it or now.
All I do know, is if something is big in the pike, to be anoounced on Friday, everyone selling now is going to regret it.
Look, Pope calling a default is not that big of a deal, as the company has the cash, and, in any event, Pope ain't going to get it just because it declares a default. So why would they? To have a claim to greater interest? That does them know good now.
I think the letter agreement is to compel the PRC to release the funds, and to demonstrate if they don't WAY more will need to be released, which turns the whole purpose of not allowing the conversion of dollars -- more circulated dollars are worth less, and China owns an load of them.
That's my call, and I think it's reasonably based.
How could it be on the nasdaq list? If it hasn't actually uplisted, I dont see how that could happen.
It's possible they just reinserted the old code, but didn't update status. I dont know the process from Stage 3 to SFDA approval. I am trying to learn more. But I do know that compelling drugs, post trials, can be approved in as short as 90 days.
Here's something more from Yahoo:
October 2008 prospectus:
"Ligustrazine Ferulic Acid Acetate (LFAA)
"LFAA is a Cardiac Cerebral Vascular innovative medicine, researched by Pharmaceutical Institute of Shandong University that is undergoing Phase III (final) clinical studies and for which the Company is in the process of negotiating a drug purchase contract. LFAA is protected by the patent of invention in China. Its PRC invention patent application number is 02135989X, publication number is CN1424313A and patent number is ZL02135989X filed in December 2005.
"LFAA is a synthetic innovation medicine based on Liqustrazine. It is the successor of Liqustrazine, which has independent intellectual property rights. LFAA helps to reduce blood clotting and prevent platelets in the blood from clumping together. Based on clinical studies, LFAA’s artery endothelium cell proliferation stimulating function is better than Liqustrazine in a number of measures. Laiyang Jiangbo is currently in the process of finalizing the drug patent and manufacturing right purchase agreement with Pharmaceutical Institute of Shandong University. Laiyang Jiangbo anticipates being able to start producing LFAA in fiscal 2010. "
It was in the October 2009 presentation, stage three tirals, and then it dropped in in the November 2009 presentation. It's always been under R&D, and it just got added to the other 3 future drugs pending approval, as a future product. But I guess you are right, I think SFDA approval takes 12-18 months. But still, if we get through the trials, the SFDA approval is ultimately a formality. But I hear you, it's not immediate.
I could be mistaken on sum of these assumptions. It's possible it's pending approval too. Who knows.
Posted on Yahoo board: LFAA is back on on future products list. Something big may be in the works.
So I dont think that Pope has sold as many as you thought. I think they probably unloaded the interest ones. It may have something to do with their investors, or just that it was there plan to receive interest, so they are liquidated the shares in lieu of interest. Just guess there.
Like I said, that includes compensation-related shares, I believe. I quoted your 12 million number on the board already, I believe. Look at that number on the last report from November 09: Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The total shares outstanding at November 13, 2009 was 11,604,546, even though the share count for purposes of earnings was lower (10.9 million). You see, it only went up 500k. That number includes about 700k shares that are compensation related, that are not outstanding for purposes of EPS.
The 12 mm number includes options, I believe. I think it's around 11.5. If you add in acct receivables. So you are paying about $2 for $2 in earnings per share. That's insane.
Who knows, they may want more.
What's up with the CC? Weird that no PR.
Sure they have control, but that's life in a microcap. They have a ton of upside here, and every reason to make it happen. And Cao does too. There is a lot of promise here, and I can overlook a hiccup as long as I hear an inspired plan. This is the transition. Right now. This poor quarter has compelled it. There will be no more sitting idle on the cash. Things are going to start happening. That's my call.
We're going to know a lot more in the next few weeks. I don't think this is the time to be talking about pulling the plug -- not to suggest that you are.
I am eager/anxious for this conference call, and I am anticipating some new release prior to the open. If not, I will put frustrated.
Hang tight.
Well, they made good on the lawsuit, and I understand that involved a transfer. I have a feeling that the letter agreement was postured as it was to create a compelling reason to allow the transfer. That could explain the difference. Pope doesn't want to declare a default. If they did, they would have already.
Now people probably better appreciate the need to file late, as the inability to get the cash out needed to be negotiated.
One thing that is encouraging is that management resolved the lawsuit, and was able to get those funds to the US.
Additionally, if you look at other financing deals for OTC China micros, you will see that the provision for late payments and additional interest is boiler plate, as this has been a systemic problem since late 2008. Certainly, Pope appreciates this fact, given all of their Chinese micro clients. This is not specific to JGBO.
Hopefully the circumstances will cause the PRC to release the funds. If not, Pope isn't going to step on its own by declaring a default, as they just converted shares weeks ago. I suspect they will take interest again, or somehow work it out. If not, it wouldn't be the worst thing to accelerate payment and pay off the debt. How the money leaves for that, beats me. But that's not JGBO's fault. It should be worked out. Pope has too much to lose by not negotiating a fair deal. Shares in lieu of interest is quite fair.
I meant to write form 13-g before.
I can't find a current one for Pope.
They may have sold some to stay below the 10% threshold. As I recall that's the most they can own. But I am a little foggy on that one.
If this uplists, they will sell via a secondary, IMO, and they won't be looking to make just a few bucks. I stand by that one.
We should know a lor more after the conference call. There is no reason an uplist should not happen at this point.
Thank you for the kind welcome.
They could be selling some of the interest payments, but I would not think the conversions. I generally don't find those statements of ownership accurate unless they are on a 13-F, but you could be right. But I still don't believe they are systematically unloading all the stock, particularly all that was just converted. It's just not how it's done in these situations, because of how it would appear (biggest outside investor unloading shares), and because of how the stock trades; it would usually be a secondary. But I've been wrong plenty of times before.
I think the quarter was fine. $4 million more in revenue, but for the shut down, and they would have hit guidance, with around $10 million in cash flow. And in any event, they earned close to 50 cents per share. That is nothing to sneeze at for a $12 stock with so much cash.
I think the impulse is to say, but but but, there are all of these other Chinese microcaps with 6 P/Es that are growing, but what's being missed is that most of them, sooner than later, will need to engage in massive financings, likely involving dilution. I'd prefer the 6 P/E with a ton of cash (effective P/E of less than $3) and a plan, that ensurers survival and the ability to shoulder bumps along the road, which all companies incur, but can destroy a microcap, or cause financing under duress.
I am looking forward to learning more in the conference call. Best to you.
Personally, I do not believe that Pope is selling any stock. It would be senseless given that they know the company will uplist. They work with Crocker, and they know that it will get done. Once some institutional interest is attracted, and the stock gets to $20+, then they will sell some, likely via a secondary offering unless the volume really starts flying.
Remember, they bought 300,000 worth of shares in the beginning of the year. If they just wanted a little money out of this, they'd stick with the interest. They are assisting JGBO with cleaning up its liabilities, so that the true value of the company is no longer lost in the complicated financing. This quarter demonstrates this. Major shut down, to no fault of theirs, and they still earn nearly 50 cents per share.
Most definitely, the communication could have been better on this, but what we are watching is a company in transition. How can you beat up a company that is still earning solid money, when it has all that cash, and you are paying a few bucks on the dollar for good cash flow and earnings.
Some of you guys appear to know a lot more than me about this company, but this is my instinctive sense of the situation.