On July 27, 2007, China Expert Technology (OTC:CXTI) Chairman and Acting CFO Huang Tao promised investors in a conference call that: (1) there would be no financial discrepancies when the company reported Q2 results; and (2) that results should be announced by August 15, 2007. At the time, I believed that the company’s conference call would help calm investor fears over the departure of CFO Simon Fu. Boy was I wrong.
After a brief rise in the days that followed, CXTI shares resumed their death plunge. They now trade at $2.78, having lost almost two-thirds of their value in the past two months.
Both retail and institutional investors are dumping shares hand over fist. The company’s largest shareholder, Jeffrey Feinberg’s JLF family of funds, continues to sell even at these depressed prices. JLF’s sales may indicate that it knows something we do not. On the other hand, it may just be prudent trimming of an overly large position in the wake of increased uncertainty and turbulence.
One thing is certain: the company will not begin to heal its rift with investors until it publishes financial statements and hires a real CFO.
DISCLOSURE: Long CXTI.OB.