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me too!
I guess that challe's post was offensive in some way, and removed. So, I'll try to reiterate it nicely.
I agree with challe's primary point: The idea that Nisse is a Director so that he can cover some of his losses is ridiculous. He is a wealthy man, and holds around $4m in SIAF shares.
$60K a year (likely $30K after taxes) would be virtually meaningless to him. As Sly mentioned, there is more aggravation and inconvenience to him than his compensation is worth.
I vote to remove it.
I am not opposed to reading negative information about the company. But that means well-informed and articulated opinion based on substantive facts, or information that contains some value.
Sly, I agree. Operationally, SIAF is flexible, agile, and technologically advanced. A winning combination, especially in agriculture!
I think we are in agreement.
I try to be objective, and acknowledge problems as well as opportunities. The company has some problems, but those problems will be overcome. The opportunity is tremendous, and I think that those who can hold on to their shares will realize great rewards.
Sorry that I wasn't clear, Sly.
I am in strong hold mode. I will not sell any shares. But, I also have a limit order in to buy at .35, in case the share price drops.
I don't know about you, but I travel often and it never prevents me from attending meetings by phone or by Skype ...
Didn't Hyperboy tell us that he's changed his trading pattern to buy late in the day?
You are right, stolpen, he ignored the warnings for too long.
Now, he's in an unenviable predicament, because he doesn't yet have the cash he needs to pay for projects that are already committed to and underway. There is no painless solution, I fear.
But I do think that he finally understands, and is moving (albeit too slowly for most of us) toward a reasonable approach to financing company projects. I am only guessing, but I fear that we will see continued dilution -- hopefully with great restraint, and explanations to shareholders that justify it -- and hopefully only for existing company commitments. I am confident that by the second half of next year the company will be cash flow positive. That will solve our problems.
If you take an objective look at what Solomon has been able to build by using the shares, I think you have to admit that it's truly impressive. This doesn't help much when you look at the value of your shares, though.
I too am frustrated, but I believe that we will be happier after one year.
Of course, any good news such as FN listing or successful bond offering, will be very helpful. However, I write this assuming nothing but the status quo.
I will use one of your examples, Netflix:
If SIAF had the p/e of NFLX it would be selling for $240 a share. A big difference is that SIAF has real assets, and the Chinese people will always need to eat.
With respect to Netflix, where is Blockbuster these days? SIAF has a guaranteed market, and a guaranteed growth model.
In early years, NFLX issued equity as needed to develop their business. That's what Sino Agro Food has done. It is exactly what SIAF said it would do 3-1/2 years ago.
There are no surprises here, and there is no fraud. Unfortunately, there was a lot of fraud by Chinese microcaps, and that has hammered the share price, which is further hammered by the dilution. I firmly believe that the end of dilution is in sight.
The CEO has continued to issue authorized shares to pay for tangible growth of the company. This is not fraud. It is a common practice that, unfortunately, doesn't work in the current market atmosphere that surrounds Chinese microcaps.
The "diluting CEO" is certainly not a scumbag. He literally works day and night to build the company. Have you read the 10Q? I am quite pleased with company growth and performance. It's unrealistic to expect perfection, and given the market climate this company has done very, very, very, very well. He is doing what he always said he'd do. He is building the company according to his plan. Until July 1, when the private placement bond was floated, he didn't have another way to get cash to grow the business. (note to RD: yes, I know that he could have sold some assets, but he was sticking to his plan. Ultimately, we will benefit from him holding on to those assets, even though we will have to wait.)
I agree that it took too long for Solomon to realize (and develop plans to mitigate) the disastrous effect that the dilution has had on the share price.
I never expected a quick win with this stock, but didn't expect the share price to be so depressed either. Even if Solomon has "learned his lesson" about using shares to grow the company, he still needs to pay for past commitments while he slows down his spending.
The dilution does not make the company a fraud. It means that it will take a longer time than anticipated for shareholders to reap the benefits of their investments.
My rating is now a strong hold, with a strong buy as long as the share price is so depressed.
p.s. I'm curious about which stocks have gone up 500% that you missed.
I'm flattered that you think I have insight, FT. Of course, I always have opinions.
I don't worry about cultural differences between Nisse and Solomon or George. I feel that there is trust and open communication. Nisse is a very seasoned international player.
However, Solomon is strong willed. He is truly a man on a mission, and I think he might disregard advice that he views as detrimental to the company goals.
Really, I just think that the company is a long term winner and that shareholders need to tough it out for another 1-3 years to realize our rewards.
SIAF's Facebook page says that the PDF version of the report is the best format. I wasn't able to view all of the images, or read all of the text (which was overwriting itself in places) on the web versions, but the PDF was clear and complete (and downloadable). It's one of several formats available here: http://sinoagrofood.investorroom.com/sec-filings
I love this idea! Too bad that it would be difficult or impossible to implement.
good post, Sly.
I defer to (and rely on) Viking, RD, The Swede and others to figure this stuff out. Even though it's probably not new, I wondered today why beef division and cattle farms are reported separately. I hope Viking, RD, or another "resident SIAF analyst" will clarify your questions.
Hi FT,
Yes I have been a director of a privately held company. I've managed in public companies, and in consulting assignments. But in this case, I am a shareholder who is as frustrated as everybody else about the share price. I always try to see the "big picture" (it really helps me), and I guess that might translate to a management point of view.
I've also toured company operations in China, and met Solomon and the board members, so I have a personal perspective.
After looking at SIAF's complicated corporate structure again in today's 10Q, I can imagine that it isn't easy to do the accounting. Certainly hiring a CFO (or promoting from within and adding accounting staff) would help. Yes, perhaps "control freak" is an accurate description of Solomon. He is involved deeply in every aspect of the business, but I believe that's pretty much required of a personality who can execute such an ambitious, visionary plan.
With all that is out of his control (FN timing, S1 timing, bond performance), there is one thing he can control: SIAF needs to report on time, and meet (hopefully exceed) all regulatory compliance requirements. Adding to their financial reporting capabilities is a no brainer.
I share your views, and am frustrated at the obvious lack of concern for shareholder interests.
But, I must remind you that that Solomon is the one person who is responsible for creating and building this company, and I think he is an irreplaceable leader. The company needs to strengthen its management team, with a CFO and others who take our interests to heart, but I don't think the company will achieve as well without Solomon at the helm.
Hi emptyone,
It's clear that you're distraught about the share price, even though you still seem to have some level of belief in the company's future value. I can certainly relate.
I wonder if shareholders can organize in a positive way to help the situation?
I've said it on this board recently, that there are a lot of really smart people here. Many of us are angry, and we're effectively powerless. I don't want to sell my shares even when the price finally does begin to climb, because I still believe that once SIAF gains momentum, my profits will be monumental.
A huge problem, of course, is that the company is not in control of the timing of events that we want to be told about. They've been informed that they are not allowed to release information, and got in trouble for doing so in the past.
Come on, smart people! What can we do together to make a difference? Complaining and venting may temporarily relieve our frustrations, but it doesn't help the share price!
Now I'm off to read the 10Q.
Thanks, Sly.
It will be nice if Fluid can re-post it minus the objectionable content.
Will there be a google drive document that we can edit and add questions to for the Q2 conference call?
Thank you, TF.
I hope that Fluid will re-post the excellent post that was deleted. If there was something objectionable in it, it could be re-stated or omitted.
US watchdog proposes greater audit disclosure
Read this article the other day:
http://www.ft.com/cms/s/0/f462bad2-0428-11e3-8aab-00144feab7de.html
This should be good news for shareholders (and probably a pain for managment). Here's the release about it from the PCAOB:
http://pcaobus.org/News/Releases/Pages/08132013_OpenMeeting.aspx
Mahalo, mauiguy2! (edited from the original: "Thanks!")
I agree with you, Sly. Solomon is "spread too thin." He is deeply, personally involved in every aspect of the business. I'm not sure why he hasn't appointed a CFO; do you remember if he discussed that in Stockholm?
Hi RD, are you demonstrating the type of behavior and activities you will conduct if Solomon doesn't operate as you demand?
I, for one, prefer it when you share your ideas that will solve problems for the company. But, I don't doubt your effectiveness in either realm.
Despite disappointment, I feel confident that the company has what it takes to weather the storms of the last year and succeed. Solomon must act in shareholder interests from this point forward. He has issued stock in order to continue his aggressive, and apparently successful, five year plan. This dilution has devastated shareholders, mostly because of the overall loss of confidence in Chinese stocks due to the widespread fraud (as we know). In a different world, Solomon's plan to issue authorized shares, as needed, to fund the company's growth, would have worked because the share price would have been so much higher. He failed to anticipate the risks, and apparently did not have a Plan B.
Solomon's attitude about the effect of dilution on us has seemed unduly cavalier until recently. I want to know that from this point forward, shareholders' welfare comes first. I hope that we can make this point clear to him in the conference call and receive his unambiguous commitment.
I am less convinced that your campaign to discourage investors is optimal, although I do not doubt that you could be very effective. But you might not get the best results for yourself. For one thing (in the worst scenario), since Solomon controls the voting shares, he could decide that such action forces his hand to take the company private in China. I definitely do not want that to happen.
SIAF is allowed a five day extension. It's happened before. For us, it means three business/trading days, so we will get the reports Monday (I think?). Perhaps we all can agree to make sure that we cover every point on the conference call. I will personally continue to press whatever buttons the call moderator asks us to press, and make sure every question is asked and hopefully answered. I'll try to review and write down the answers afterward, so that we can discuss (and so stuff I don't understand can be clarified by others who listen). It's time for all of us to be involved!
Here's a recent, enlightening discussion of the Chinese economy. Pretty sobering. Good news is that agriculture is one of the promising areas.
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/16/a-simple-clear-explanation-of-chinas-economic-woes/
I think that quite a bit of the info in that report is pretty much outdated.
I agree with you completely, The Swede! I also need time to re-read and digest the press release, and I really value the other post-PR discussion on this board. Reading a few days of posts on iHub after the results are released results in a better conference call, in my view.
I think that companies get an automatic (5 day?) extension for quarterly filings, don't they? So in reality, we may not get news until the 19th or so. I assume that new auditors might need extra time, as SIAF is a pretty complex organization ...
I agree tomatotom with concerns and skepticism about Sino Agro's potential forays into real estate development. Solomon has a winning formula without adding such a distraction. He is too "hands-on" in his management style, and I would hate to see his focus "diluted" by a tangential venture. I have concerns about the restaurant businesses, but don't know enough about the management structure and Solomon's level of involvement in them.
FT, do you know of any companies that issue a press release about when a press release will be issued?
With respect to the conference call, I prefer that it's held several days after the earnings are released, so that I have time to read and digest the 10Q and press release. Then I'm able to formulate questions that I can't anticipate before then, and hopefully get timely answers directly from Solomon.
I also appreciate the questions that are compiled ahead of time by this group (and I've added to them in the past).
I know that it's off topic, RealDutch, but I remember learning about him after he was assassinated. I can't imagine your shock and grief, to lose such a promising, influential candidate. Pim Fortuyn was able to speak openly, candidly, and clearly about obvious problems and rational solutions, whether politically correct or not.
P.S. I value your posts on this board for their deep and analytical due diligence, but also for your open, candid, and clear statements of obvious problems and rational solutions. Sharing your work helps us fellow investors gain insights and develop strategies, so thanks very much for your contributions.
Edited to add: I realize that I didn't acknowledge your reference to cultural differences, and I know that you (and/or Pim Fortuyn) are correct.
Hi challe08,
Yes, indeed, I did post about the contrast between the "quite formal and proper Swedish bankers and the entrepreneurial Chinese agribusiness team of Solomon and George." I tried to use tactful language to describe what I perceived as suppressed, but palpable, tension and anger between the parties. I'm afraid to post more of what I heard while at Penser Bank, because I do not want to offend anybody, or jeopardize the process. But I will state unequivocally that there was a bad feeling between the Penser folks and the Sino Agro folks, possibly due to some mistakes such as the Consilium report. In addition, it is my understanding that Penser continued to ask for "just one more" piece of information, and upon satisfactory receipt of that information there would not be another response from Penser until they'd ask for another piece of information. All of that information was available to them at the beginning of their engagement, so this was very frustrating to the SIAF team.
I'm probably saying too much already. I do hope that the individuals at Penser and Sino Agro Food have resolved their differences, and are moving toward a successful resolution: the FN listing. This listing is the next step we need, from which we will have the opportunity to move up to NASDAQ and institutional investors.
For what it's worth, Stolpen, the company is (still) prohibited by the SEC from making any obvious PR efforts at this time. We all can see that there is more and better information than in the past, on sinoagrofood.com and on the company's facebook page, but SIAF is limited by those restrictions that it can NOT appear to be promoting the company or the stock in any new ways.
Also, I heard in Stockholm that Penser was furious that information about their work as CA was made public, so I imagine that's why we don't hear anything new about it from the company. They are waiting for Penser to make something official.
In a similar vein, I've seen quite a few posts from emptyone and others, suggesting that the company should be capturing institutional investors. Wouldn't that be wonderful? Indeed, it would, if there were even one institution that would consider looking at SIAF. It's not a stock that can or will be evaluated, not as long as it's on OTCBB. Period. This is not influenceable or changeable in the current situation.
The company needs to figure out how to uplist to NASDAQ or another exchange that is considered worthy by institutional investors, before anything other than trivial interest will be given by institutions to investing in SIAF.
Of course, this must be as frustrating for them as it is for us.
Zzzzzzzzzzzzz
Boring ...
I think that the new accounting firm is PCAOB registered or certified. They just have not been subjected to an audit by PCAOB yet.
This has been discussed ad nauseum in recent weeks, so I think you'll find the reasons if you read through the posts.
From the start of my timeframe, it has become a seven or eight year play, now down to four years. Four years ago, I thought it was a five year play, but because of the dilution, I've extended my horizon. Until I went on the investor tour last year, I was skeptical, but I now truly believe we have a winner. Sadly, the win has been delayed by the combination of the stain of the Chi-scams, and by the dilution. Although companies often fund growth through dilution, the China taint has suppressed the share price so that the dilution hurt us terribly. Solomon clearly didn't anticipate this, and has scrambled for a backup strategy to fund capital expenditures. He seems to be back on a promising track now, but only after deleterious effects on long term shareholders.
I didn't start recruiting other investors until after the investor tour, and of course many of them are under water now. But I always told them it could drop again, but would bear fruit in four to five years (now almost down to four). Thus, many -- including me -- have been averaging down lately.
Although I always included very strong caveats about risks, I hope that I won't need to join the witness protection program either!
p.s. Are you on Maui? If so, stay safe during Tropical Storm Flossie!