Marvell: Is It Time To Throw In The Towel? [View article]
This is so unfortunate. A year ago I read Marvell’s existing financial statements then and initiated a small position. Not knowing the extent of damage the pending Carnegie Mellon litigation would bring, it seemed like Marvell presented a large margin of safety. As Marvell’s valuations became more depressed, the proposition of owning shares could not have been more attractive. At a valuation of $8 per share Marvell would have been valued at $4.28 billion, which consisted of $2.2 billion in cash and equivalent. For a company that does not have much debt, investors would have received the the repurchase program as intended for the use of cash, the business itself and everything else for only $3-4 a share. Throughout the year it seemed like Marvell was immoderately punished for having temporary headwinds and problems that were fixable. Following the story, I purchased heavily especially during this quarter as the shares further descended. It would have been quite an investment, especially after what the earnings per share would have been after the share repurchase program - had the patent infringement damages not cost this much. Now that it has been disclosed, even if Marvell manages to appeal the damages for half its cost at $550 million there goes the share repurchase program, a great amount of value destroyed. Without regret, only after two weeks of purchasing more, I have to sell my entire position some for 20% loss. I would not short the company but the risks now far outweigh the rewards, the issue itself has become speculative anyway you look at it, even if the company manages to survive it has the potential of losing 25 to 75% more of its value through this litigation alone. Great article following up on Marvell. Obviously the market answers such questions, however, for the retail investors anybody else care to extrapolate on what they think about Marvell shares now?
Xinyuan Real Estate: Still the World's Cheapest Stock? [View article]
Ricard,
Excellent post, this puts into perspective that if numbers are fabricated it can cease to continue operations. ---
On to XIN, It is surprising that after $20m repurchase, the stock has not reacted positively and short interest is at 47%. If they are not fabricating, avoiding privatization is justified since they plan to engage the US markets. While they have not committed to the idea, there are no better indication of legitimacy other than to wait until they make considerable investments in the US where the cash will be verified. With the Chinese space however, are financials fabricated? Could it owe debts to institutions we cannot view? It is as hard to claim if it is legitimate or fabricated, as it all comes down to certain individuals within the institutions that are also in the fraud, which has been in some previous fraudulent cases.
I believe it is better to avoid this company for now, unless you have some information which guarantees that they are not practicing fraudulent activities. If after obvious clarity that shows it is legitimate, given such a promising future, even if you are late to purchase, there shall still be plenty to gain if the stock rises by $1.00, conversely, a lot to lose at $3.00.
Is Xinyuan Real Estate The World's Cheapest Stock? [View article]
What designs XIN to be incongruous with the variables attributed to fraudulent companies in China are that it has had bad quarters, paid a dividend and repurchased shares. While these may dispute many other fraudulent claims, these itself are not guarantors of legitimacy. Paying heed to fraudulent concerns and a real estate debacle in China, we receive these low prices. Now this raises a red flag.
The red flag arises from the undervaluation of XIN selling under liquidation value. We shall see if this will hold true and determine if quarterly dividends will repudiate this present red flag.
If by then these prices persist, abjuring privatization would yell fraud. Other than that we wait.
Is Xinyuan Real Estate The World's Cheapest Stock? [View article]
Ricard,
Of course there will always be a risk that a given individual or company is fraudulent, regardless if the company is incorporated with any of the Big Four auditor firms, RTO or IPO process and the CEO owning an exorbitant amount of shares. If a company is to be fraudulent, it will achieve and perdure regardless of impediments. However if we employ this much cynicism towards everything in the Chinese market then what is left? During the last 6 months plenitude of fraudulent companies in China were exposed such as ABAT, CCME, SNOFF, etc.
Despite the remaining cash after the buybacks and dividends, if fraudulent activities are non existent, it is as intended to weather uncertainty.
A postulation that lead XIN to precipitously drop from its IPO price was the IPO being perceived as overpriced, this beginning was of no surprise. What rendered the continuous drop for a longer duration were the fear of Chinese stocks alone, the scrutiny of fraudulent Chinese stocks. After that we have the fear of a Chinese real estate bubble.
If anybody can extrapolate on the issue about the regulations of the CSRC that makes it problematic for XIN to get listed in the SSE please post a reply.
Marvell: Is It Time To Throw In The Towel? [View article]
It would have been quite an investment, especially after what the earnings per share would have been after the share repurchase program - had the patent infringement damages not cost this much. Now that it has been disclosed, even if Marvell manages to appeal the damages for half its cost at $550 million there goes the share repurchase program, a great amount of value destroyed. Without regret, only after two weeks of purchasing more, I have to sell my entire position some for 20% loss. I would not short the company but the risks now far outweigh the rewards, the issue itself has become speculative anyway you look at it, even if the company manages to survive it has the potential of losing 25 to 75% more of its value through this litigation alone.
Great article following up on Marvell. Obviously the market answers such questions, however, for the retail investors anybody else care to extrapolate on what they think about Marvell shares now?
Xinyuan Real Estate: Still the World's Cheapest Stock? [View article]
My apologies, that makes short interest only about .47%.
Xinyuan Real Estate: Still the World's Cheapest Stock? [View article]
Excellent post, this puts into perspective that if numbers are fabricated it can cease to continue operations.
---
On to XIN, It is surprising that after $20m repurchase, the stock has not reacted positively and short interest is at 47%. If they are not fabricating, avoiding privatization is justified since they plan to engage the US markets. While they have not committed to the idea, there are no better indication of legitimacy other than to wait until they make considerable investments in the US where the cash will be verified. With the Chinese space however, are financials fabricated? Could it owe debts to institutions we cannot view? It is as hard to claim if it is legitimate or fabricated, as it all comes down to certain individuals within the institutions that are also in the fraud, which has been in some previous fraudulent cases.
I believe it is better to avoid this company for now, unless you have some information which guarantees that they are not practicing fraudulent activities. If after obvious clarity that shows it is legitimate, given such a promising future, even if you are late to purchase, there shall still be plenty to gain if the stock rises by $1.00, conversely, a lot to lose at $3.00.
Is Xinyuan Real Estate The World's Cheapest Stock? [View article]
The red flag arises from the undervaluation of XIN selling under liquidation value. We shall see if this will hold true and determine if quarterly dividends will repudiate this present red flag.
If by then these prices persist, abjuring privatization would yell fraud. Other than that we wait.
Is Xinyuan Real Estate The World's Cheapest Stock? [View article]
Of course there will always be a risk that a given individual or company is fraudulent, regardless if the company is incorporated with any of the Big Four auditor firms, RTO or IPO process and the CEO owning an exorbitant amount of shares. If a company is to be fraudulent, it will achieve and perdure regardless of impediments.
However if we employ this much cynicism towards everything in the Chinese market then what is left? During the last 6 months plenitude of fraudulent companies in China were exposed such as ABAT, CCME, SNOFF, etc.
Despite the remaining cash after the buybacks and dividends, if fraudulent activities are non existent, it is as intended to weather uncertainty.
A postulation that lead XIN to precipitously drop from its IPO price was the IPO being perceived as overpriced, this beginning was of no surprise. What rendered the continuous drop for a longer duration were the fear of Chinese stocks alone, the scrutiny of fraudulent Chinese stocks. After that we have the fear of a Chinese real estate bubble.
If anybody can extrapolate on the issue about the regulations of the CSRC that makes it problematic for XIN to get listed in the SSE please post a reply.