CDSDD/CDS
I was unable to trade my holdings in this issue today. CDS management had heard of problems with Fidelity and Ameritrade and stated that they didn't know what the problem was, and that holdings should not be affected by the reverse/forward split, that they'd already spoken with the transfer agent.
Why is China Direct able to effect this type of move when almost every other company must receive shareholder approval?
no change in share count, no proxy as this action is not done with the mind to delist the company to bring the number of shareholders below 300 via the reverse. It was a decision made by the BofD.
An unannounced move like this could lead to lawsuits from small shareowners who will have a taxable event triggered when they could have chosen to buy the requisite number of shares to avoid a cashout. Why couldn't you have set a date that would give the oddlot holders a chance, if they chose, to buy?
The number of shares is very nominal, most of the holders were involved in previous company incarnations with very few shares.
I also have some questions about the mechanics of this action. The old CDS shares are retired and a new CUSIP is added. Do those people who have shorted CDS shares have any responsibility? Or do the broker-dealers have any responsibility to locate and bring in shorted shares?
Many Chinese small caps have had their share prices suffer significant declines. Do you have any idea how many shares might have been created via naked short sales? And if so, does this reorg force any buyins from those who have no locates?
in theory naked shorts should have to locate and borrow, but in practice there will probably be no change
Finally, do the shares which you are "repatriating" in this reverse/forward split count as part of the 2.5million share buyback?
could be either stand alone or considered part of buyback. wasn't a clear determination, but agains just a few shares
has the buyback begun? can't say, but did state that share prices in the mid 4 area make a very attractive price.
TRADING: "More Signal...less Noise"
LIVING: "One World, One Family, Warm Heart" Dalai Lama
