4350 days ago
A shareholder in Harmonic Energy (ASUV.PK) has spent considerable sums in recent weeks to send out a missive to tens of thousands of UK investors headlined “the one stock you must own before the New Year” with bold claims about how the shares could gain 3200%. In very small print, it is noted that the shareholder is himself looking to sell the shares. Since the company is, according to the latest SEC Filing of December 14, technically insolvent, yet at $1.05, is capitalized at $66 million, this promotion is misleading in the extreme. But it has worked, in that the shares have been heavily traded and have gained 20 cents in the past two weeks. If you hold the stock, this is your chance to sell. Grab it.
4437 days ago
Slowly, it is sinking in. Facebook (FB) was floated in May as a growth stock. Forecasts and valuations were based on extrapolating historic trends. But in the new media world, that is impossible. My bear case against Facebook was always that the rating was too high based on historic numbers and that one had to be the metric used given that forecasting was impossible. Rather more quickly than I had expected, recent data is starting to vindicate my stance. I argued here on 28th August that the shares were worth $5, and I stand by that view.
4446 days ago
Fourth quarter and full year results out from Manchester United (MANU) on 18th September were marginally below forecast – to miss estimates just a few weeks after your IPO is pretty poor form. Talking of pretty poor form, Manchester United are currently 2nd in the English Premier League but have looked unconvincing against some weak sides so far. At $12.58 the shares are already well down on the $14 IPO price and also on the $13.35 price at which I explained in detail why this was a sell on 27th August. But there is worse to come: my target remains $7.
4446 days ago
Chinese solar play LDK Solar (LDK) announced results for the three months ending June 30th, 2012, on September 17th. The figures were shockingly bad, even worse than analysts had forecast, and the outlook statement offered little prospect of recovery. At this rate it seems likely that by Christmas the company will have negative shareholder funds. At $1.25 (down 13 cents from my original sell advice on August 30th) and still capitalised at $167 million, the stock remains a sell with a target price of virtually nothing.
4452 days ago
China-based Focus Media Holding Ltd. (FMCN) is still the subject of a bid led by its CEO Jason Jiang and backed by big name private equity firms, including Carlyle. Some shareholders have claimed that the $27 a share bid is too low. But the offer is subject to due diligence. This company has been the subject of numerous claims about its accounts not being quite up to scratch in the past, and if the bidders walk, the shares will almost certainly collapse. I advised shorting the stock and detailed past claims on Aug. 30, with the stock at $24.51 on the basis that the downside was $2.49, but the upside could easily be $14.51.
In light of a series of allegations made by the Bronte Capital Blog within the past few hours, I would suggest that this bid is less and less likely to go through. The allegations may well be dismissed by Carlyle, but I would not bet on it. They certainly raise issues. Thus, at $24 the case for staying short has just become quite stronger.
4455 days ago
JA Solar (JASO) has responded robustly to plans by the European Union to consider tariffs on Chinese solar panels as part of an anti-dumping clampdown but it and other Chinese solar companies such as LDK Solar (LDK) and Trina Solar (TSL) just cannot win and here is why.
4466 days ago
I have written extensively in recent months about how China is heading for a very hard landing indeed (see HERE, and HERE, but also how official statistics from the PRC are simply overcooked – that is to say wrong: see HERE. As each week goes by the evidence that the hard landing is accelerating appears to mount as does the rapidly emerging scale of fraud that has taken place in that country. As such I would personally be cutting my PRC exposure to nil.
