This is funny, well... almost funny. I know four and five star rated analysts who cannot move a stock like KNDI moved today. So, who is Ben Rabizadeh, a metro New York City pharmacist, to date the author of one Seeking Alpha article. I have authored three Seeking Alpha articles about Kandi ─ "Short Kandi: A Misplaced Bet", Short Kandi: Raised Bet Or A Lonely Game", and "Short Kandi: The Wrong Road" (notice the common theme) and yet I never enjoyed the move in KNDI Ben enjoyed today. I also authored "Misinformation or Mendacity", an article discussing the prodigious KNDI misinformation disseminated by authors published at Seeking Alpha, Motley Fool, The Street, and others.
I labor this point for seven good reasons:
First, yesterday, July 22, 2014, the mark at the close order was greater than 260,000 shares, today it was nil. Did the short load up and then expend all he had? It would seem so. Second, Ben Rabizadeh, a metro New York City pharmacist, opines about KNDI's most recent Form 10-Q filing in an article published by Seeking Alpha, (yes, this Seeking Alpha) in today's last hour of trading, (actually Ben accuses KNDI of fraud - yes, the F-word) and KNDI declines 12.18%. Third, Pomerantz, a law firm, immediately issues a press release about "investigating" KNDI. And by the way, my brother, like me, is a former CPA and, like me, he's enjoying retirement. Unlike me, my brother was a forensic accountant before retiring. He's been long KNDI for some time now. I know my brother, I trust my brother, I don't know Ben or Pomerantz and not knowing Ben or Pomerantz I certainly can't trust them. Fourth, by my calculations, today the option specialist had to deliver about 400,000 shares of KNDI to settle in-the-money options that expired at the end of last week. Fifth, KNDI's short interest for the period ending mid-July will be reported after the close of the market tomorrow, July 24th, and I predict it will have increased from the prior period. Sixth, likely most importantly, Puma Biotechnology was up $174.40, 295% today raising it's market capitalization to $7 billion and, more than anything, this is what "the short" fears about KNDI, a breakout to new highs and then higher highs. Seventh, and finally, this attack and manipulation was orchestrated and launched while KNDI is awaiting effectiveness on its recent S-3 shelf registration knowing the company would have to be "quiet" thereby stifling any response from the company.
I am very confident that what I enumerate above was a carefully scripted event to conspire to instill fear, uncertainty, doubt, and despair in KNDI shareholders much like what other China-based U.S. listed stocks have endured so that "the short" can limit its loss. Rest assured, most of today's late trading was conspired and orchestrated by "the short" and high-frequency traders to manipulate KNDI to create a panic. No doubt some KNDI shareholders did panic but I suspect it was a relatively small percentage of the late day trading we witnessed, and especially in the after hour trading - the den of manipulation. What we witnessed in late day and after market trading was manipulation.
Personally, I don't believe in coincidence. Especially since I have been long KNDI long enough to have endured several events like I witnessed today. I do know this though, if you own KNDI and you want to enjoy a twenty, thirty, forty, fifty bagger or more, you should have a strong stomach, an iron will helps too.
A logical question any informed investor or anyone should ask is, "How do they get away with this?" Frankly, I don't know. I compiled and filed hundreds of SEC filings. I was one of eighteen EDGAR Pilot Program filers. How did Enron, Bernie Madoff, and scores of others get away with it? That's a question only the regulators - the SEC, FINRA, and the Exchanges (in KNDI's case NASDAQ) can answer. I do know this though. They could not get away with what I enumerated above in China, or England, or Iran (even Ben would have to attest to that). Not for a second. The rules are different there. I suppose this is one of the small prices we pay for freedom in America. Any uninformed person can say what they want about anyone or anything, well almost anything, and suffer no loss - physical or financial.
So here in America? Kandi certainly suffers an occasional stacked deck. But if you're a KNDI shareholder and you have the stomach, and an iron will, you have the opportunity to enjoy a hell of a ride because KNDI's fundamentals will overcome what we witnessed today. It's simply a matter of time. And unlike the short, time is long.
Disclosure: The author is long KNDI.