The real damage to share price is done more by the perception the issuance creates and by the share overhang, when debts are paid in stock to people who need the money
Totally agree with you here. That has been my point all along. I'm not saying the share issuances haven't been accreditive. The stock is NOT going down because of the usual dilution effect meaning lower EPS growth or such. Not at all. This stock is not trading on your usual metrics. The market is not evaluating SIAF whether it has a PE of 1.5 or 2.5 It doesn't make an iota difference.
The stock is going down because people who get paid in shares need to sell their shares in order to eat tomorrow. The stock is going down because entities who do bigger deals in shares short the stock and trying to lock in some better price.
The stock is going down because people fear that SIAF is another scam. So far all china scams had one thing in common. They all diluted the hell out of the stock at unreal low valuations and everybody in the investment community was scratching their heads about it. What people miss is that you get a lot of sellers which would otherwise not be selling their stock. Investor perception!
My question is how long does a 4 million share issuance take to be absorbed
We can't just count the 4 million shares in Q1. There is a lot of "old" supply still coming in. And we also have to count all the shares that get sold from people BECAUSE they lose trust, because they decide to trade the stock in light of the constant dilution. We have to factor in all the "noise" as well IMO. Just look at today. 350k shares sold. Are they kidding me? It's not that we have no buying. People are happy to sell at these levels. 350k shares below 50 cents. This is nuts! If this company is legit where is this stuff coming from if not from people who get paid in shares? Basically no retail guy is in the black at these levels. Are the swedish guys selling? Sure a few probably do but I think the majority is still buying otherwise who would absorb all these shares on a daily basis? Who would touch this stock with the incredibly bad sentiment in the sector at the moment? Other than a few people here on this board I don't see any demand in the US.
And question 2: if/when will an uplist/dual list perception -- combined with consistent 100% growth -- overtake the "dilution" concerns
You probably anticipate my answer since I posted this a few times here in the past. In my opinion it WON'T while trading in the US. Not in the way we shareholders would like to see. Sure the stock can easily go back to 70 cents on some big news or on some continued swedish buying or for whatever reason. That said we have been at 70 cents a few weeks ago and a lot of people would still be in the red at 70 cents. Heck maybe a buck is doable again. Who knows. I just don't see any real appreciation in the US market, like some acceptable valuation. Just look at other senior traded chinese stocks from this sector.
Just my opinion and don't forget I always look through shorter term glasses in the market, the last thing I wanna be is a "planned long term investor". That doesn't mean that I don't hold a stock for months or even longer, but I don't plan for it and I don't close my eyes and overlook the obvious signs in the short run. That also means I can never get in agreement on certain arguments with people who buy a stock, then go to sleep and "hope" that in 3-5 years they make some money. But that's ok I guess. We all have our own individual style.
