I was also at the presentation yesterday and talk both to Salomon and Petrejus by the way, we all sat at the same table during dinner.
1. At the rate the company is moving on Salomon feels that the big reason for the stockprice is due to the short sellers. The company growth rate and future plans do support a much higher share price. I can agree on that to of course. In this regard I think its wise to monitor the short selling in the interest of knowing whats really going on with the stock. I think 2 dollar is very realistic in the short term its only a fully dilluted p/e of 3.
2. The "extra" 10 million share is held by Salomon, since they are not converted they have no voting power and no right to dividend. I did not hear Salomon say that he will convert them this year. I did hear him say that he thought the eps fully dilluted is not giving the right picture since the 10 million of not converted shares have no write to dividend until they get converted. I asked him why he didn´t retire them (that was before he explained that he was holding them). He said that someday he would like to get some money back, but he didn´s say anything about converting them this year, that is a assumption of the listeners that never was stated by Salomon. I understood it as that was something to happen (conversion) in the future when the company would be "cash rich".
3. If you are a producer i China you are tax free, but if you are a retailer you have to pay tax. So the tax issue is a consequence of the company from this year being fully integrated in most areas. They dont only produce the product they will also retail it and thats why. So its a good thing in all since the biggest money is to be made in the business to the end consumer.
4. He was very clear that the 68 cent was fully dilluted. I think a lot of the missunderstandings is because of the language barrier. This was told by him, unforced and did not come as a reply to a question that could of been misunderstood.
Since Lee (according to what I heard in row 3) didn´t state any plans of converting his shares in the near future and he have already told us a number of times that he has no plans of selling shares in the near future, there shouldn´t be that much to support.....
If I understand it right Salomon retired shares last year when he financed throug equity because he didn´t want the shareholders to suffer and he didn´want to fail on his promises.
I get the feeling that he shows the shareholders great respect in the common quest to build value in the company for the shareholders.
AI
