What do you do if you run a small Chinese company and your stock is getting hammered for reasons that are unclear? Faced with this situation (stock down 33% today), Yi Bo Sun, CEO of China Digital (ticker: CHID.ob), a manufacturer of battery shells for use in electronic products including mobile phones and digital cameras, chose to respond with a press release - and what a beauty it is:
....China Digital Communication Group (ticker: CHID.ob), one of the fastest growing battery component production companies in China, today made an announcement today regarding concerns on its business health.
Yi Bo Sun, China Digital's Chairman and CEO, commented,
"Operations of the company are running strong and are fully on track. We anticipate strong earnings and growth."
Comment: First, try to avoid redundancies when releasing news to the press - "today made an announcement today.....".
Second. Give us a break. Your stock is down 33% for the day on 13 times the average daily volume, and all you can say is that everything is on track??????
Bottom line is there is little information in the public domain about China Digital. Furthermore, with a small float, the stock is generally vulnerable to wild price swings - as we saw today. The difference in today's trading is that the stock decline was on relatively huge volume - which is incredibly discouraging.
If only we had the opportunity to get a better feel for this company by hearing more from the company's CEO....
For a recent profile of China Digital, see here.