Do you think this was a fraud in the "China Hustle" OR CGA way in that assets are vastly overstated?
I don't think its an extreme fraud in the way Zero says, but clearly something is very wrong here.
The odd thing is that Solomon had put in $2million of his own money (which he got paid back) at zero interest. (Which he hasn't done again).
Unless the finances are totally fraudulent, why would someone do this? He didn't take interest so it looked like he was trying to do right for the company and shareholders.
I'm not sure why people keep blindly believing this company but we have:
no TRW Dividend
no Dividend
Notice from ECAB for default
nearly 100% share dilution.
And this is a company that is "profitable" and has hundreds of millions in assets.
So the ? is what is the lesson here? Unless zero/mark are correct and its a full on fraud, but then Garrett would be taken for millions (he bought at $1 early this year).
It seems like its just a mismanaged low cashflow situation, but its so ridiculous with the cancelled TRW Dividend, hidden dilution, cancel cash dividend, lawsuit from ECAB but it HAS paid a dividend in the past (frauds dont do that).
Like, how can this be so ridiculous, only way it makes sense is its a fraud or fraudlike (significant assets faked) but then why pay a dividend in the past, or get loans from ABC (Agri bank of china, legit lender) etc. why would Solomon put in $2million of his own money at zero interest?
Even if it succeeds we may end up with nothing because if extreme dilution. The next step is the next AS share raise would should not surprise anyone (it would be a surprise if it doesn't because what has this company done that didn't hurt shareholders)
Just trying to understand what even happened it behaves like a fraud, but then does actions like a non fraud.
Maybe it always was fraud(lite) in the sense of overstating assets.
I mean even the meat business, geez. Like when it doesn't work we lose, when it "works" like TRW we lose.
Just trying to learn so I don't make the same mistake twice. I hope the lesson is don't invest in emerging markets because they are all fraudy because that sorta sad and racist, even if its true.
finally, speaking of profits if its a shell game what % of the profits are real and what % are just loaded into a A/R that will never be collected. You can report a billion in profits if you sell to companies (TRW) that will never pay.
Luckily I stopped buying very early this year when dilution news came out (after the fact). But I still got stung bad as I averaged down all last year at much higher prices.
Of course if its ultimately zero it doesn't matter if I bought at 25 cents.
