Sure as hell. Just like XNY. Two foreign fashion companies operating in China. XNY still has a market cap of $19M I think. Both companies have ADS's even that reflect 16 ordinary shares. I always liked ZA (ZAHLY) better.
They wanted to raise a few millions even though they had a lot of cash, like $100M+. Dumbest move I ever saw. Reminds me of CCCL but this one is even worse. They have a line of credit in China. You would almost think that they did it deliberately because... they were already leaving the US (didn't hire a new international CFO).
That's why the market cap dropped below $15M. They acquired an internet company for big bucks. That's why they needed the money. So the story goes.
Let's see what my broker says. Who will have to pay the fees if the ADS's get cancelled (converted into 16 common). No point in buying a few more shares if there is a hefty fee attached to it for me.
You would think that they have some kind of foreign listing because they have ADS's. But they don't. Well, I'm willing to bet they will have at some point. Of course the apparel business hasn't been doing well in China and they could still go bankrupt after (over)spending all that cash. That's what distinguishes them from companies like HERB and even CCCL who are making money.
So yeah, you can think of a lot of reasons why it should be trading at 1 cent. But this would be a $300M company if listed in China. You better believe it. And that... is what boggles the mind.
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