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Richard Pearson

 
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  • Clearsign's Lies, Omissions, And One 'Bad Actor' [View article]
    Mr. Berry,

    Your write up on this situation has attracted my attention and I will be taking a closer look.

    I was a bit disappointed to see that no one from MDB decided to post comments on seeking alpha as they did with my recent article discussing UNXL. Perhaps comments from them will be forthcoming.

    I am continually surprised by investors such as Mr. Padnos who continue to think that the best way to get objective 3rd party information is to ask the people who stand to benefit the most from spreading misinformation.

    In Dec 2010 I personally visited China Education Alliance (referenced above) and I was taken to fake schools that bore a different company's logo. The chairman was taking me around personally.

    In one case we showed up a bit early because there were two employees trying to tape a China Education Alliance logo over the real logo for a different school. Unfortunately they were using scotch tape and it wasn't sticking.

    When I asked the chairman about this, he made an unintelligible comment and excuse and assured me that the company had really just done $35 million in revenues. He encouraged me to take pictures of all the students at this school and publish them.

    At first I thought that he assumed that I was stupid enough to believe it. But then I realized that when he pretended that it was true, he assumed that I would pretend to believe it and the only people to lose out would be the suckers in the US who didn't actually know.

    Many people who pump these stocks simply do not care if the companies are in fact committing fraud as long as they (the pumper) can personally claim plausible deniability when the whole thing goes up in flames.

    The people perpetrating the fraud seem to get frustrated when someone calls them out on it and won't go along with the pump party and make money on the way up.

    After all. when the stock keeps going up, everyone wins. Right ?

    Thanks for your research in this article. I will have a closer look at the details and links this weekend.
    Feb 7 10:08 PM | 2 Likes Like |Link to Comment
  • Why Is Uni-Pixel Falling? [View article]
    Adam,

    I have responded to anyone that sent me any reasonable comment via SA direct mail. I have had very sensible dialogue with both longs and shorts on this name. There are now about 150 comments on this article, so I am not going to sit and track all of the daily comments, including those which suggest that I don't exist.

    Also, just so you know, I did try to call MDB's research analyst for 3 consecutive days, multiple times per day, in advance of my article. The number did not ring nor was it transferred to a secretary. It simply went to voicemail...obviously given the nature of my past articles I was not going to leave a voicemail alerting MDB to my short article.

    The fact that MDB an "investment bank" immediately posted on SA was very surprising. I have never seen any real investment bank do this due to the obvious compliance problems it raises, especially when MDB actually owns the stock as well as arranges financing for it.

    I am still confused about MDB's response. Were the links broken ? or was the site being re-designed ? Actually, we know that the links were not ever broken because we could see that the links were "re-directed" to a descriptive page about MDB. This had to be done manually. If the links had been "broken" we would have seen an error, and if MDB had fixed the "broken" links to re-direct them to a generic page, then they could have just as easily restored the links to the pdf files at that time.

    My article came out at 10:30 am...MDB responded before 11:30 am...and readers were already seeing the restored links to research within 37 minutes (12:07 pm day of article)...so clearly fixing this "technical difficulty" was not too difficult. So why did it take nearly 2 weeks to get us the research back ? And when it was restored how is it possible that it was done so quickly ?

    Easy, because MDB took the research down and then put it back up after my article called them out on it.

    If you would like to discuss further, please send me an SA direct mail.

    thx

    rp


    Feb 5 08:09 AM | Likes Like |Link to Comment
  • Trina Solar: As Debts Come Due, $14 Billion In Off-Balance Sheet Liabilities [View article]
    Hi Rames,

    Yes, TSL can possibly get access to gov't backed bailout loans, grants or subsidies as did LDK and STP.

    I believe that I made the point that Trina's products will continue to be sold, but it will be the creditors that have claim to the assets in the future, not shareholders.

    That is the common sense part.

    In any event, we only need to wait a few weeks for the 20F, and then a few months until the debts come due, so we can compare notes at that time.
    Jan 7 12:01 PM | 3 Likes Like |Link to Comment
  • Trina Solar: As Debts Come Due, $14 Billion In Off-Balance Sheet Liabilities [View article]
    actually you are wrong. as i mentioned, Poly prices are now getting so low at they are near their own cost of production.

    are you assuming that Trina's suppliers will sell below their own cost just to give Trina good deal ?

    The renegs already happened and Trina is selling below cost.
    Jan 7 11:58 AM | 2 Likes Like |Link to Comment
  • 2 Worries That Remain After The Solar Energy Rally [View article]
    Hi Chaz,

    Just FYI, your numbers regarding cash, debt and margin on Trina are all materially incorrect. Yes, if you casually browse Yahoo Finance or Google Finance, those are the numbers you will see. However you would be better served to read the actual filings if you want to know what the actual numbers are. It seems there is a widespread misunderstanding of these numbers due to people not reading the filings.

    For your convenience, I will be sure to provide you with the correct numbers shortly.
    Jan 6 11:29 PM | Likes Like |Link to Comment
  • A Troubling Visit To Cleantech Solutions [View article]
    i agree with you 100%. The SEC is underfunded and understaffed. At some point in time when a company implodes to the pennies it might not become big enough to be prominent on their to-do list as they chase bigger fish. But as for the auditor, their track record on either ignoring or abetting fraud is so clear that they should def be blacklisted.

    At some point in time i hope the process changes but no idea when.
    Dec 18 12:50 PM | 1 Like Like |Link to Comment
  • The End Of The Road For Insolvent China BAK [View article]
    Nothing,it would be a chinese bankruptcy and they would just voluntarily delist. Well, so then stock goes to true zero. But given the small number of shares outstanding and the concentrated ownership at some times the stock just runs out of sellers, so it could just hit some level and then not move, making it tough for anyone short to cover. In the meantime, borrowing the stock is expensive to borrow, so getting stuck in it could get very expensive. If you choose to short, be careful. In any event, going long on this name is a non starter.
    Dec 17 01:55 AM | Likes Like |Link to Comment
  • The End Of The Road For Insolvent China BAK [View article]
    Surely you must be joking ? They are selling their products below cost and are buried with short term debt. Their future is not "good" because they have no future beyond a few more months. Why would anyone sign up a new supplier that is already insolvent ?
    Dec 17 12:52 AM | Likes Like |Link to Comment
  • The End Of The Road For Insolvent China BAK [View article]
    Surely you must be joking ? They are selling their products below cost and are buried with short term debt. Their future is not "good" because they have no future beyond a few more months. Why would anyone sign up a new supplier that is already insolvent ?
    Dec 17 12:52 AM | Likes Like |Link to Comment
  • Hi-Tech Pharmacal Set To Drop By 60% On Earnings And Fraud Investigations [View article]
    Thanks for the comment.

    As I said below, this earnings "beat" was the result of two small miracles - Flonase sales went slightly up rather than slightly down. As I said in article, bottom line is ultra sensitive to flonase sales. The other surge (over 50%) in sales of a single product was a one time event ahead of a price increase. Neither of these events are likely to reoccur, so mgmt needs to find 2 new miracles in 90 days.

    Rather than deliver the worst qtryl eps in 3 years, HITK delivered the 2nd worst eps in 3 years. Doesn't seem inspirational to me, but it means we need to wait until next Q to find out....even though stock is very pricey even at current levels.

    As Adam said above, short thesis still in tact, just needs to wait a bit longer than i had expected.

    Thanks for the comment.
    Dec 9 11:28 PM | Likes Like |Link to Comment
  • Hi-Tech Pharmacal Set To Drop By 60% On Earnings And Fraud Investigations [View article]
    Yes, thank you for agreeing with me.

    I don't disagree that they have built a nice little company. However their big run with flonase is over which has left them tremendously over valued.

    This stock is not too volatile between earnings, so this will be a slow trade rather than a quick trade, but into the $20's we will go.

    Anyone long this stock will need to realize that they pulled off two small miracles to make earnings this past quarter. Which is fine, and congrats to hitk. But in order to make earnings next Q they will once again need a couple of miracles. Maybe it will happen...again. Then again maybe not.

    Any bets on whether or not Seltzers sell more shares now that stock is at $36 ?

    Any other bets on when we finally see the "mystery product" ?

    Just curious.

    Either way, good luck with your trade.
    Dec 9 11:21 PM | Likes Like |Link to Comment
  • Hi-Tech Pharmacal Set To Drop By 60% On Earnings And Fraud Investigations [View article]
    My call was for down 20-30% on earnings with the rest to be realized over time. I was not predicting a 60% drop on earnings.

    In any event, my prediction was mostly based on my expectation that HITK woluld report their worst quarterly EPS in roughly 3 years.

    Instead, HITK pulled two rabbits out of their hat. Flonase sales were better (less bad) than expected and there was a one time surge in sales of a single product due to advanced buying ahead of a price increase. Neither is sustainable....and the result from these dual rabbits was that instead of reporting the worst EPS in 3 years...HITK reported the 2nd worst in 3 years.

    Is that reason for joy ?

    People who piled on to this trade (myself included) were expecting a fast and easy payday on earnings. When that didn't happen, may shorts continued to cover. Looking at the volume, we can see this to be the case over the following 2 days.

    HITK will continue to have a revenue stream and net income, the problem is simply that the valuation at over $30 is in no way justified.

    The fraud issues are a wild card, they may amount to nothing or they may prove very costly. We won't know until the news hits. But this too is not being factored into the price, and thank you, because Merck is a good example of this.
    Dec 9 05:19 PM | Likes Like |Link to Comment
  • Hi-Tech Pharmacal Set To Drop By 60% On Earnings And Fraud Investigations [View article]
    the anxiety is well deserved and a one day short squeeze does nothing to change that.

    you also are concerned about insider sales and destructive self dealing investments. although I think you should be more concerned about the fraud investigations. maybe they end up as absolutely nothing, but the fact that there are on going lawsuits and investigations is not being factored in at this price.

    in fact even without any fraud issues, we can see that the company is wildly over valued based on these earnings which were simply less bad than expected.

    when I wrote about HITK the stock was at $33, now it is at $35 due to a short squeeze, so not exactly a ringing rejection of the problems at the company or the over valuation.

    HITK trades very thinly, which means that most of the time it does not move much at all. but when it does (like post earnings) it moves pretty big. the downside moves can be just as big as the upside moves. so this will be an interesting stock going forward.

    the likely catalyst downward probably doesn't come until next earnings now, unless their are further developments from TX, Mass, or elsewhere.

    in any event, there isn't much else to make the stock go up from here, so this remains a very good short over the next few weeks and months, in my opinion.
    Dec 7 09:26 AM | Likes Like |Link to Comment
  • The End Of The Road For Insolvent China BAK [View article]
    Not sure which part you are referring to when you call me a "liar", given that every thing I have stated comes straight from company filings.

    Also not sure as to why you didn't know I was short when it was then first thing disclosed before the article even began....and it was highlighted as a column for "short ideas".

    Again not sure how you have any hope for a company which has been selling its products at well below cost and has no cash to pay its $170 million in obligations. What part of selling below cost implies any type of acceptable product in the market place ?

    The fact that Li's shares have been pledged for a long time does nothing to change the fact that the banks now hold the shares as collateral against debts which cannot be repaid. The banks will sell these shares. Period.

    I would suggest you make it a point to actually read the articles you criticize, before leveling such aggressive criticism.
    Dec 4 08:42 AM | 3 Likes Like |Link to Comment
  • The Surprising Truth Behind Herbalife Put Volume [View article]
    I think some people are missing my point entirely. The change in vol (and skew) should have been much more pronounced given the volume of puts that changed hands during such a short period of time. Smaller buyers were pushing up the prices (vol) of the puts, but the constant selling by one or more large funds kept it from going too high.

    That was the entire point of this article, that smaller (uninformed) buyers were lining the pockets of the whale by buying up the puts...the he was continually selling.

    so yet, i agree that there was plenty of buying, but it was by smaller copy cats. The big money trade going on here was in constant selling.

    and yes, this was clearly a closing trade.
    Dec 2 06:00 PM | Likes Like |Link to Comment
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