CCCL: I'm not really surprised by this reaction from management because around June I contacted the CFO and told him a private-equity friend of mine was curious if they would be interested in pursuing a take-private transaction -- The CFO said they were not interested at that time. I hoped that with the continued bad stock performance they would chance their tune, guess not.
The fact though, is that every single Chinese RTO has the opportunity to do a take-private at these evaluations -- Private-equity is salivating at the chance to make the big bucks on transactions. I expect the vast majority of them have been approached with such ideas by people wanting to conduct such transactions. I highly doubt CCCL is in the minority of companies who don't want to go through such a process (which can take quite awhile BTW) less than two years after they come public in the USA.
What I find funny is that when a company decides to go private, shorts claim they want to escape ongoing public-company-oversight and are trying to hide the fraud (Or its a gimmick to buoy the stock price). When a company decides NOT to go private, shorts claim they want to avoid the 'oversight' of the going-private process. Make up your minds people, it can't be argued both ways!
Do I wish the company would pursue such a take-private deal? Yes, definitely. Do I believe the fact that they do not wish to do so immediately implicates them in fraud? No way. If that was true, i'd expect the same implication for every single Chinese company out there trading at a P/E below 3 -- Because you can bet your money that someone has asked management if they want to do a take-private/list-in-HK deal sometime in the last 6 months.
-Fernando
