I don’t post often, but I am still a HRCT shareholder with over 60,000 shares. I have some spare time waiting for the Super Bowl, so I want to share with you my perspective on Hartcourt:
1. Fundamentally, Hartcourt still have a lot of desirable assets in China: long-distance phone service (Elephant Talk), financial data provider (Sinobull), streaming technology (SA, V2) and E-learning (MBA with Cal State). All of these companies are among the first rank, waiting for the explosion of demand brought about by WTO and the fastest-growing economy in the world (China). Furthermore, all of these operations are generating good revenue ($3.7 Million in Q3) and should be profitable in this year.
With such valuable assets, Hartcourt can develop its own strategy to become the leading company in its field or be acquired by some multi-national giants. Either way, HRCT shareholders should reap big benefit.
2. However, doing business in China is thousand times more difficult than in the free markets of US or Europe. The progress is extremely slow and the bureaucracy, WTO notwithstanding, can be huge obstacles. If Hartcourt would persist, its future would be bright. But a loss of focus and determination could bring down the company like many other Western casualties in China.
3. The new management of Dr. Wallace Ching has been very quiet. However, considering his background (managing over $1 Billion in assets for Prudential), we should feel comfortable that his connection to institutional investors would bring fruitful results in Hartcourt’s search for big league playing time.
4. The spin-off of SB, ET and SA should be completed in Q1; giving Hartcourt management plenty of options in the newly-acquired shares: distributing them as dividends to gain loyalty and new investors; using them to acquire more companies and to group them and spin them off again (repeating the same successful formula); or just simply selling them to generate cash for whatever strategy they choose…These new shares will be additional weapons for Dr. Ching.
5. The likelihood of Hartcourt being taken over by some multi-national giant is very high. After all, Hartcourt is partnering with many giants like Reuters, China Telecom, Ji Tong, Legend, Microsoft, Yahoo, HP, etc.. If it is acquired, the windfall profit to HRCT shareholders should come earlier than expected.
6. Most of us are concerned with the share price, of course; but I don’t think any change would take place until Dr. Ching is firmly established (at least 6 months from now). Major changes will come in a few years when the WTO is fully implemented and China’s economy ready to take off, big time.
7. I am lucky that I am able to put my HRCT shares in the safe deposit and don’t have to think about them for a few years. But for those who expect a quick jump in share price should realize that it is not likely to happen. You might sell and walk away or you might use them to play the daytrading game of buying and selling at each fluctuation.
8. The paid bashers are still very active as HRCT shares are still attractive to MM manipulation (large float, huge volume, very volatile). Actually they are the proof that Hartcourt is still a very strong company. They would have gone by now if they see that Hartcourt is a dead dog.
9. It ‘s good that HRCT shareholders are gathering at I-Hub now. RB board with all the lies and slanders of these paid bashers, repeated incessantly, will be forgotten within a month.
As I look at things, despite all the inherent risks of a small company operating in a complicated market, Hartcourt is still an attractive long-term investment. What the management has done over the last 2 years is remarkable. Like Dr. Phan said, the company is now 10 times stronger and better than it was when the share price was $10 (post-split). But that’s life. Those who have not cashed out must now wait for the next wave (say 2004?), or spent the rest of their lives crying over spilled milk. Despite the tech melt-down that destroyed Enron, Global Crossing, At Home, Exodus, PSI Net, E-Toys, Value America… our Hartcourt is still going strong and stable. As it has no external debts, its financial future is guaranteed for at least another 10 years (?). In my portfolio, HRCT is the only OTC company and I feel I made the right choice. The future is always uncertain, but I am positive and optimistic on Hartcourt’s chance. JIMHO.
