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  • Muddy Waters Requires a Leap of Faith they don’t Deserve [View instapost]
    Esther:
    You ignored my cite to the SEC filings about the 'make good' agreement. Did you conclude the CFO lied to you? Are you upset about it? Do you trust anything from ONP now?
    We weren't discussing your first order of business. But the company's response and your post make no sense, causing extreme doubt of the company's credibility. ONP focused on the difference between the English names as translated. However, a chinese name can be translated several ways into English, so that is unimportant. What is important is the Chinese name, which Muddy Waters showed was the same.
    You can't translate the english name back into the chinese name without more info. ONP had to know the importance was the Chinese name, not variations in the translations into the English name. Therefore, ONP was making a defense that they had to know made no sense if one knew about english and chinese and translating between the two.
    Aug 4 05:20 PM | Likes Like |Link to Comment
  • Orient Paper Inc. (ONP): Does It Add Up? Questions for Orient Paper's Investigators. [View instapost]
    drjohn35:
    I hihgly doubt you can find one company, particularly a manufacturing company and certainly not a paper manufacturing company, that reduced their headcount more than 30% and more than tripled their revenue and more than quadrupled their revenue in the space of three years. If you can, I bet the explanation will be apparent or easy to figure out.
    I have done my research. It is a great deal more than what I have posted here. It appears that you haven't done yours and I mean, have you done any research at all on ONP? When you have, let me know. Just saying it is a small company doesn't explain anything. It doesn't provide a single bit of fact or evidence to support that ONP is telling the truth.
    Why don't you call management yourself and ask them? The CFO is Winston Yen. He lives in Soutthern California and has an accounting office here. He was working only part time as the CFO and recently became fulltime. He appears to act more as a public relations or investor relations role than CFO. He appears to not to know much about the business. Management had no explanation, just start speaking double speak and talking about other things.


    Aug 4 04:29 PM | Likes Like |Link to Comment
  • Muddy Waters Requires a Leap of Faith they don’t Deserve [View instapost]
    Esther:
    See ONP's 8k filed On October 7, 2009, wiht the SEC. Here is a link: www.sec.gov/Archives/e....
    Here is a link to a report of Pope's portfolio. www.fatpitch.biz/cgi-b....
    I must disagree with you about Muddy Waters. I found their claims well documented and ONP's claims not to be well documented.


    ONP entered into a securities purchase agreement with, among others,Pope Investments II, LLC. The Securities Agreement has a "make good" clause, requiring ONP to escrow 3 million shares and, if they don't meet the performance threholds for 2010 for net income, either all - if net income is $0 or less - or a percentage - if net income is less than the performance threshold but greater than $0 - gets distributed pro rata to the purchasers.

    PSee ONP's 8k filed 10-8-2009 which summarizes the Securities Purchase Agreement with, among others Pope Investments II, LLC, and attached the agreement as on Exhibit..

    DEF 14C filed 10-2-2009 with the SEC.

    Are you familiar with SEC filings? ONP files those. I read them.
    Ah, Mr. Yen, former CFO to Chilco River Holdings.

    www.sec.gov/Archives/e...

    Sure, Muddy Waters has provided documentation for their claims and I will continue to provide documentation for mine. Are you familiar with SEC filings, Esther? You can find the information in ONP's SEC filings - it comes from them.
    Aug 4 04:15 PM | Likes Like |Link to Comment
  • Orient Paper Inc. (ONP): Does It Add Up? Questions for Orient Paper's Investigators. [View instapost]
    drjohn:
    You seem to just make assumptions that appear to me to be completely unwarranted, certainly I can verify they are about me, my emotions, and what i have or have not done. You provide absolutely no information whatsoever that is pertinent to the analysis of ONP.
    For example, I certainly have had discussions with management. I certainly haven't posted a fraction of the information I have obtained in researching ONP.
    I am somewhat surprised you just didn't apologize about your errors on International Paper's revenue, failing to read and interpret the footnote. I am even more surprised that you are deeming to provide me investment advice, which I have not solicited from you.
    I certainly don't advise anyone to take any action regarding ONP based on myself or anyone else. I advise them to do their own work and due dilligence, come to their own conclusions and make their own investment decisions.
    When you have actually some due diligence on ONP, I would be interested in your overall view.
    In the meantime, when you actually have some facts or evidence that contradicts mine or my view, I would be very happy to hear them (hopefully not a reiteration of all the information out there already).
    Otherwise, I will consider the advice worth what I paid for it.

    Aug 4 03:26 PM | Likes Like |Link to Comment
  • Muddy Waters Requires a Leap of Faith they don’t Deserve [View instapost]
    Megisto387:
    I have not focused my energies there because I do not believe that it necessary for me. If you find it necessary, go ahead to your heart's content. For me, the claimed increases of revenue by ONP with the reported changes in their product mix and the claimed size and turnover of their customer list, along with all my other research, was more than enough to disbelieve ONP's reported revenue. My internet searches, which I did not document, failed to find the claimed nonexisting companies, while I could easily find other chinese companies. ONP claimed on numerous occassions that it had long term relationships and contracts with customers that did not appear to be verified by the turnover. Add to that the detail that Muddy Waters was able to provide as an outsider researching the situation compared to the lack of detail that ONP provided in response, despite being the insider having all the information, added further confirmation to my belief.
    Likewise, my research into the supplier picture was enough for me. China is resourced starved, forced to import most of the raw materials they use to make paper. ONP itself report 34 other paper mills and International Paper, one of the largest paper making companies in the world, has a cardboard box plant right in Boading, Hebei. ONP had released press releases where it said (1) it was going to import paper; and (2) it was going to merge with other companies that had the raw materials to make paper. ONP was looking for raw material suppliers. Now, the report is that the ONP's has had long term, stable suppliers of raw materials? the main supplier turns out to have owned shares in ONP? And it turns out to be owned by the Chairman and not disclosed? And it turns out that its financial data reports little to no activity or revenue?
    Why don't you come up with some research and data of your own about ONP, rather than just harassing other people?

    Likewise, the undisclosed ownership of ONP's

    For me, a review of the claims of ONP regarding their business, their revenue and the reported turnover of the claimed customer list was sufficient to conclude that I did not believe ONP's revenue. Add to that the undisclosed ownership of the "alleged" main supplier by the CEO
    Aug 4 03:15 PM | Likes Like |Link to Comment
  • Orient Paper Inc. (ONP): Does It Add Up? Questions for Orient Paper's Investigators. [View instapost]
    drJohn:
    You have to read those footnotes. Look at the 2006 10k and you will see 24 billion in revenue. In the 2007 10k you cite, they changed the net revenues for 2006, noting: "certin prior year amounts have been reclassified for comparative purposes to conform to current year presentation of discontinued operations."
    Sorry, being a smaller company doesn't explain anything.
    Aug 4 02:58 PM | Likes Like |Link to Comment
  • Orient Paper: Key Pieces of Evidence for Fraud [View article]
    A description of the paper market, focused on China, along with a cite to sources would be a little long here. Would you like me to do an instablog where I spell it all out?

    Main problem is that production capacity has been outstripping supply for the last ten years, both locally in China and globally. China has no competitive advantages for making paper, government has propped up the industry with $33 billion in subsidies since 2002. Look at per capita demand for paper in China - very low compared to other countries. Some of these types of paper you are mentioning are not made by ONP.

    Too much information here. Can do an instablog if you like and you can comment on it. Not helpful just focusing on a small part of the picture - need the whole picture to see the weaknesses in the paper manufacturing business, particularly in China.
    Aug 4 02:16 PM | Likes Like |Link to Comment
  • Orient Paper Inc. (ONP): Does It Add Up? Questions for Orient Paper's Investigators. [View instapost]
    drjohn35:
    Not sure where you get your data from. As of December 31, 2005, International Paper had 68,700 employees and 24 billion in net sales. As of December 31, 2009, International Paper had 56,100 employees and 23 billion in net revenue. So, number of employees fell and revenue fell. If you were talking about other specific dates, please give me those. (by the way, since you are researching intenrational paper - did you know they have a cardboard box facility in the city of Boading in Hebei province? They make the whole cardboard box, not just the corrugated paper. they failed to list IP as one of their competitors. So much for Orient Paper's location advantage.)
    However, you are missing the big picture. Of course, it is possible to decrease employees and increase revenue. However, when you see the size of the decrease in employees, almost 30%, and the size of the increase in claimed paper production, revenue and net profit (revenue tripling and net profit quadrupling from 2006), it is very unlikely unless you have some excellent explanation. Usually, the explanation is well known to all. In this case, I don't see how it is possible at all considering the business.
    ONP made no representations that R&D was outsourced. Theoretically, R&D could be outsourced, but it wasn't reported in this case, so that explanation holds no water.
    Orient Paper maybe a little too aggressive with marketing hype? That may be an understatement. How about this press release by Orient Paper in 2008:
    "Orient Paper inc.: Orient Paper Inc.: one of China's largest paper manufacturers, plans to build a new paper mill in Baoding, Hebei, in the second half of 2008, with an annual production of 1.2 million tons. The 2-million-square- metre facility will produce mainly corrugated paper, offset paper and writing paper. Zhenyong Liu, CEO of Orient Paper, said: "It is going to be a very large facility that will enable us to compete with the biggest paper businesses in China, as well as the rest of the world." see line at www.pulpandpapercanada....
    ONP never got around mentioning what happend to that project. Oh sorry, Orient Paper Inc.'s ticker symbol then was OPAI. Then it changed to ORNP.
    There are plenty of interesting press releases like that with Orient Paper Inc. with plans that never materialized. See if you can find them.
    Aug 4 01:56 PM | Likes Like |Link to Comment
  • Muddy Waters Requires a Leap of Faith they don’t Deserve [View instapost]
    Megisto:
    I just use the customer and supplier list as an example. I am not going to go through the entire Muddy Waters report to explain it for you all the places they provide ways to independently verify their information. It is also just one example as to why ONP's response is unsatisfactory. Again, I am not going to go through each point.
    Why I am not going to go through each point? Well, because I don't think we need to go beyond ONP"s own representations in the SEC filings, on their website, and in their promoter's videos to see the inconsistencies, issues and problems. I have detailed some of these in my own instablogs.
    As far as the Deloitte's financial advisory firm that was hired to assist Loeb & Loeb's investigation, there may be a conflict between the new board members and management. The new board members were placed on the board in compliance with ONP"s agreement with the investors in the recent capital raise. Another term in the capital raise is that the investors are entitled to and additional 3 million shares for nothing if ONP reports $0 net profit this year or a percentage of the 3 million shares equal to the percentage ONP fails to meet the $18 million net profit "make good" requirement by. These same board members hired the law firm and the financial advisory side of Deloitte to conduct the investigation into fraud. Any prediction as to ONP"s net profit reporting for 2010?
    Aug 4 11:31 AM | Likes Like |Link to Comment
  • Orient Paper: Key Pieces of Evidence for Fraud [View article]
    Modie:
    Do you know anything about the paper business? it is a commodity business - they are low barriers to entry. Tthe real price of paper has fallen over the last decade as component prices, such as raw materials, has doubled or tripled. Meanwhile, capacity has been growing much faster than demand. China's demand is weak and they export most of their paper. Do you want me to go on? Papermaking is not a good business, particularly in China, where paper manufacturers have shown poor profitability.
    How about the alleged, local regional advantage? ONP themselves indicated in a press release that there were 34 other paper mills. What they didn't mention is that International Paper has a cardboard box plant right in Boading in Hebei province.
    Aug 4 11:21 AM | Likes Like |Link to Comment
  • Orient Paper: Key Pieces of Evidence for Fraud [View article]
    apolo_11:
    good luck! You may be right. I certainly am focused on details. If the representations are not true in the SEC filings about other things, then they certainly might not be true about the revenue. This is especially since those details are supposed to show support that the companies is making the revenues it claims.
    How many shares do the PIPE investors for the last capital raising still own? Why do I ask this? Well, if ONP reports $0 revenue for 2010, the PIPE investors get, for free, another 3 million shares. And guess what? The new members of the board of directors were appointed by the investors and they are the sole members of the audit committee and called for the fraud investigation. By the way, it appears that the biggest investor, Pope, sold its shares. Any predictions as to what ONP will report in net profit in 2010?
    Aug 4 10:03 AM | Likes Like |Link to Comment
  • Muddy Waters Requires a Leap of Faith they don’t Deserve [View instapost]
    Megisto:
    I disagree with you on ONP's response to Muddy Waters. For example, you say it gave paper companeis that could be identified, but it did not list a single customer or supplier in its response and did not provide any identifying information for these. I already commented on your original article above. I could careless about the information on W.A.B. and Carson Block, it is a red herring as I am only interested in assessing ONP, as it is the investment decision at hand.

    Esther:
    Most successful investors make a big point of saying that they only make investments decisions on facts, evidence and sound reasoning, not on emotion. You seem to think the opposite important. Furthermore, historically, when have you ever seen the board decide to hire a law firm to investigate fraud allegations against management and see it turn out good for the company?
    Finally, the investors required, in the capital raise, that the 3 new board members be appointed. Those 3 board members are the sole members of the audit committee and were the ones who decided to do the investigation. The investors will get 3 million more shares for free if ONP reports $0 net profit for 2010. The biggest investor, POPE Management, already sold out its shares. Any predictions as to the net income that ONP will end up reporting this year? Think the CEO will still be around?

    Fraluc:
    Again, the dislaimer is a red herring. ONP provides disclaimers. Each of the analyst, or the ex-analysts as Roth Capital and Hudson Securities have suspended coverage, have disclaimers. I disclaim putting much stock into making any conclusions just because a disclaimer exists. And, I disclaim that as well.
    Aug 4 10:01 AM | Likes Like |Link to Comment
  • Orient Paper: Key Pieces of Evidence for Fraud [View article]
    apolo:
    Yes, I focus on the details, as that is what I use to form my opinion on whether their revenue is correct. What are you using?

    prettyboyflody:
    I was actually long ONP originally and feel I was fooled. I am short now. If I am wrong in my short, I feel the appropriate result is that I should lose money. Yes, my purpose is to get correct information out, as I feel that this stock is being pumped correctly with misinformation.
    However, I am also hoping that if I am wrong, my posts will cuase people to present information that proves me wrong or at least any correct infomration that is contrary to my view so I can evaluate it.
    As Feynman said, 'the first principle is that you must not fool yourself and you are the easiest person to fool.' Obvioiusly, I feel I fooled myself initially by being long. If I am fooling myself now, I would like the evidence to be presented so I can change my mind.
    Aug 4 02:42 AM | Likes Like |Link to Comment
  • Orient Paper: Loeb's Not the Right Firm for the Investigation [View article]
    Modie:
    You seem to be missing my point. The company resorting to insiders providing loans for working capital is generally considered problematic. It generally means the company is doing poorly.
    ONP's operating entity claims to have started in 1996, so it is not like they needed money to get started.
    Listen, if you think it is a good sign for insiders to be providing loans to fund working capital, that is your prerogative. It is not my view and historically, companies that did that were shown to be having financial problems.
    Aug 3 10:41 AM | 1 Like Like |Link to Comment
  • Muddy Waters Requires a Leap of Faith they don’t Deserve [View instapost]
    Esther and Fraluc:
    You are accusing Muddy Waters of a fraudulent report without providing a single bit of evidence or support. In fact, you don't list anything in the Muddy Water's report you actually dispute or can disprove.
    In contrast to you, Muddy Waters did a 30 page report with facts, evidence, and sound reasoning there from. They provided interviews, names and phone numbers, pictures, cites to documents, etc.
    You make learn from Muddy Waters the due diligence you should put in before you start accusing someone of fraud.
    Aug 3 10:35 AM | Likes Like |Link to Comment
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