Yuanxi Zhang
Long/short equity, value, special situations

WSP Holdings: The Deal Is Running Out Of Time Again

Recommendation: Short WSP Holdings (NYSE: WH)

Target Price: $1.50 or less

Thesis

We are highly suspicious if the go-private deal of WSP Holdings (NYSE:WH) will close before the outside date. The company again fails to file the annual report on time this year. Its profitability remains poor. The corruption investigation related to PetroChina could heavily impact the company, which is a possible reason the previous acquirer walked away. Again, the company has run out of time to close the deal. Considering all these factors, we believe a short position is attractive given the favorable risk-reward ratio.

Updates on the Merger

On March 19th, WSP Holdings provided an update on the pending go-private deal. The previous acquirer,...

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