in4thelonghaul

Buy LDK Solar's Panic Selling Drop

I don't now, nor ever have I held a position in this company. I have to admit, that I am tempted to go long on Monday, depending first on how the market reacts to the Barron's piece.

You make a revealing statement in your write-up: "I will add to my position on any weakness from here. I am investing in this company based on my 'faith' in management, I just 'hope' they don't deceive their shareholders."

You express "faith" in a mngt. you don't actually know (apparently)..and you express uncertainty by your use of the word "hope".

You seem to reason (somewhat logically) that mngt.'s immediate promise of an 'independent' audit, and the CFO's assurances are indicative of the accuracy of the company's version or position...since the CFO is exposing himself to possible legal entanglements if he is lying.

Yet I would point out that Mr. Situ must be as aware of the potential legal penalties which may await him were his charges proven to be false....and possibly even if they are true.

I suspect it is a rare occurrence where someone making false accusations bothers to send copious documentation to the SEC and other outlets.

I suspect the "truth" lies somewhere in the middle.

My guess is that yes indeed...LDK's mngt. tried to play 'fast and loose' with the 'scrap' inventory...this is simply deceptive when not revealed upfront (at least in footnotes). My suspicion is that such loose interpretation of the facts is more common among Chinese firms than American firms (simple supposition on my part from various stories I have heard and read over the years).

The real question is - if true...if mngt. was using a bit of 'fuzzy' math, if they were painting an unjustifiably rosy picture...how inaccurate were they?? Does the 'truth' justify a 40/50 % haircut? Is LDK a screaming buy now, or will further revelations cut the sh/pr further...and by how much?

One thing is certain...a cloud now hangs over LDK mngt. Their decision to (apparently) be less than absolutely transparent in their reportings has left a stain of doubt as to how credible other figures might be as well.

I don't pretend to be able to discern with certainty whether there is any serious malfeasance here...or simply an honest misunderstanding, or acceptable difference of opinion.

My plan is to wait for the market's reaction on Monday to the Barron's piece and then go long...but not very long. Only a fool or an aggressive speculator in search of riches, rushes into a cloud of smoke assuming the reports of fire are mere poppycock.

Of course, there are a lot of very rich individuals, who have achieved that status by aggressive speculation.