Tuesday, October 14, 2014 10:55:09 AM
Posted from sharesleuth:
Kandi Technologies Group Inc.: The return of the cyber shills
Posted on October 7, 2014 by Chris Carey
Last June, shares of Kandi Technologies Group Inc. (Nasdaq: KNDI) doubled in the space of a week, spurred on by a mysterious network of social-media touters who later deleted their posts or shut down their accounts entirely.
Kandi’s stock went on another big run this summer, and the cyber shills were back with a vengeance. Sharesleuth turned up more than 40 related accounts at StockTwits.com that have touted the Chinese vehicle maker and certain other companies. We found more than 100 accounts at Yahoo.com’s finance site that promoted the same set of stocks.
Kandi’s shares jumped from $14 in early July to a record $22.49 on July 22, aided by a steady stream of positive press releases, as well as a flood of bullish posts on StockTwits and other investment-related message boards.
Sharesleuth’s investigation found that:
Most, if not all, of the suspect StockTwits accounts that touted Kandi listed false names for the purported posters. Many of the profile shots used with the accounts were lifted from free photo sites, dating sites, news sites and other sources.
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A stock promoter with a criminal past has been one of the most prolific posters on the Kandi boards at StockTwits, Yahoo.com’s Finance site and InvestorsHub.com. The suspect accounts at StockTwits and Yahoo duplicated some of his posts.
The coordinated posting ended abruptly in late August, just before Kandi announced it was selling $71 million in stock to undisclosed investors, at a 10 percent discount to the market price. The touting last year also preceded a share placement.
After Sharesleuth tried to contact the posters via StockTwits, most of them quickly changed their account names, logos and other profile information.
In the six weeks after the suspect accounts stopped posting about Kandi, the company’s share price fell by nearly a third, and daily trading volume declined as well. But on Monday (Oct. 6), the touters resumed their efforts. They reappeared just minutes before Kandi’s stock went on a sudden tear, rising from $13.50 to more than $15 in roughly two hours.
The touters posted more than 70 messages on StockTwits and Yahoo between 11:30 a.m. and 4 p.m., using nearly 20 different aliases. They continued posting into the evening and early the next morning (Oct. 7) (To see screen captures, click here and here)
MULTIPLE ACCOUNTS, MULTIPLE IDENTITIES
The so-called sock puppet accounts at StockTwits have generated roughly 4,000 messages since May — nearly all of them focused on the same 15 or so companies. Sharesleuth’s investigation found that many of the posts also showed up on the message boards at Yahoo.com’s Finance site, some under corresponding account names and some under different ones. We reviewed two years of postings on Yahoo’s Kandi board and various other boards and identified at least 120 accounts that have been used to systematically tout the same set of companies as the StockTwits posters.
Those accounts are responsible for more than 35,000 posts since the start of 2012.
ANOTHER RED FLAG
The existence of the touting operation is another red flag for investors who might be eyeing Kandi, which is based in Jinhua and makes electric cars, go-karts, all-terrain vehicles and other products.
Sharesleuth previously has raised questions about the accuracy of Kandi’s sales figures, particularly its claim to have sold thousands of electric cars in the United States. We also exposed the hidden role a Canadian stock promoter named S. Paul Kelley played in the reverse mergers that brought Kandi and 10 other Chinese companies public.
In May, the SEC brought fraud charges against Kelley and four other defendants, alleging that they concealed their ownership stakes in two of the reverse-merger companies – China Auto Logistics Inc. (Nasdaq: CALI) and Guanwei Recycling Corp. (Nasdaq: GPRC). The SEC said they artificially inflated those companies’ share prices through manipulative trading, then made millions of dollars by dumping their stock in public and private sales.
Kelley and another defendant, Roger D. Lockhart, quickly settled the charges by agreeing to pay more than $9.3 million in disgorgement, penalties and interest.
The SEC also alleged in its complaint that Lockhart and two other defendants engaged in a scheme to manipulate Kandi’s stock price in the fall of 2009. The SEC said Kandi’s chief executive, Xiaoming Hu, agreed that the company would provide 350,000 shares to pay for the effort. It said one of the defendants, George Tazbaz, later provided that same number of shares to stock promoters.
Kandi disclosed in March that the Securities and Exchange Commission was investigating the company and had subpoenaed certain documents. It said in its latest quarterly financial report, on Aug. 11, that the probe was still active.
Kandi’s stock closed Monday at $14.50. That gives the company a market capitalization of roughly $670 million, down from a peak of $940 million.
Recent KNDI News
- Kandi Technologies Group, Inc. Completes Redomicile Merger • GlobeNewswire Inc. • 04/16/2024 01:00:00 PM
- Kandi Technologies Reports 2023 Financial Results • GlobeNewswire Inc. • 03/14/2024 08:05:19 PM
- Kandi Technologies to Report FY 2023 Financial Results on March 14, 2024 and Hold a Conference Call on March 15, 2024 • GlobeNewswire Inc. • 03/11/2024 12:00:00 PM
- Kandi to Showcase Innovations and Network at 2024 PGA Show • Business Wire • 01/18/2024 02:15:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 12/29/2023 09:05:23 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 11/27/2023 01:03:11 PM
- Kandi Technologies Announces Share Buyback of Up to $30 Million • GlobeNewswire Inc. • 11/27/2023 01:00:00 PM
- Form DEF 14A - Other definitive proxy statements • Edgar (US Regulatory) • 11/17/2023 09:05:06 PM
- Kandi’s First 500 Fully Electric Mini Golf Carts to Launch in US Market • GlobeNewswire Inc. • 11/15/2023 01:30:00 PM
- Kandi America Partners with Peavey Mart to Expand Kandi Products into Canada • GlobeNewswire Inc. • 11/13/2023 01:00:00 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 11/08/2023 12:30:58 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 11/08/2023 12:15:08 PM
- Kandi Technologies Reports Third Quarter 2023 Financial Results • GlobeNewswire Inc. • 11/08/2023 12:00:11 PM
- Form PRE 14A - Other preliminary proxy statements • Edgar (US Regulatory) • 11/07/2023 09:10:16 PM
- Kandi America Partners with Rural King to Expand U.S. Footprint • Business Wire • 11/06/2023 02:15:00 PM
- Kandi Technologies to Report Third Quarter 2023 Financial Results and Hold a Conference Call on November 8, 2023 • GlobeNewswire Inc. • 11/02/2023 12:00:00 PM
- Kandi America Acquires New Distribution Center to Accommodate Planned Growth • Business Wire • 09/27/2023 01:15:00 PM
- Form S-8 - Securities to be offered to employees in employee benefit plans • Edgar (US Regulatory) • 09/11/2023 09:04:15 PM
- Kandi America Comments Appearance at Mid-States Rendezvous • Business Wire • 09/06/2023 01:00:00 PM
- Kandi Technologies’ Next-Gen All-Electric Crossover Vehicles Enter Mass Production • GlobeNewswire Inc. • 08/22/2023 12:25:00 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 08/08/2023 11:30:32 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/08/2023 11:15:26 AM
- Kandi Technologies Reports Second Quarter 2023 Financial Results • GlobeNewswire Inc. • 08/08/2023 11:00:46 AM
- Kandi Technologies to Report Second Quarter 2023 Financial Results and Hold a Conference Call on August 8, 2023 • GlobeNewswire Inc. • 08/03/2023 12:30:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 07/14/2023 01:19:19 AM
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