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TRE - Sino-forest put.


alertmeipp

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My guess is this is probably for safety reason.

 

 

Safety?  Are they worried about a mad horde of investor storming the office in khakis and oxfords and beating them with their financial calculators?

 

 

Was a joke.

 

EDIT: I would suggest ppl concerned should call their office to find out why.

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Someone mentioned that the company has been around for like 14 years or what have you...so was Enron. I have no stake in this one either way. It is way beyond my circle of competence.

 

This is true, but it does make it rather less likely for these specific china-based frauds. 

 

I have no position and do not expect to have one. China is too difficult an environment for me.

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Run, run away fast. There is no way you guys can figure it out whether TRE is a fraud or not! (Most likely it is fraud!)

 

Chinese growth story is amazing, but trying to find a real small-cap company is mission impossible. To give you guys an idea how difficult it is. I have a friend who is doing APO business for those small-cap chinese companies. One company he has being doing business since 2005 was CMFO. He talks to CEO, CFO regularly, he met management team many, many times, he was there in the factory many many times. But now, he is not sure if the company is fraud or not. Think about that. How can we figure it out thousands of miles away?

 

Another example. A few months ago, a company from my hometown selling wine was scheduled to be listed on Shanghai A shares board. The city spent lots of ads promoting the company on TV, big outside board, everywhere you can find. Just a week before the listing, the listing was stopped. SEC in China find that the company is a fraud! Think about that. The city is helping the company to manipulate numbers to just get listed. In chinese mind, stock market is a casino. If you lose money, it is your own fault, move on.

 

I was attracted to the low valuations of those chinese small-cap stocks last year. I tried to uncover one real company and failed. Yes, so far, I have not found one small-cap chinese company listed in US that is real. None!

 

If you still want to try, then look at Alibaba Group. Yahoo owns 40% of Alibaba Group, but Ma Yun just sold  Alipay for pennies to himself!

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Run, run away fast. There is no way you guys can figure it out whether TRE is a fraud or not! (Most likely it is fraud!)

 

Chinese growth story is amazing, but trying to find a real small-cap company is mission impossible..........

Agreed. Last year, I made around 400% on the one unloved smallcap us-listed chinese company. And I tried to do the same in recent months. I found one us-listed chinese corp that is likely to be legit from all information I gathered ( talked with CFO,IR firm and finding info on local news website).I did everything I could expect visiting the company in Beijing.But I just sold out all my position today .I planed to hold it for longer time frame but the recent news release from company made me nervous. The number just doesn't add up.It is too good to be true kind of news.  And CFO stopped responding my email after I shoot some questions.And I just found the discrepancy on the Chinese news and what the company claimed they made sales in last years (2010 sale in Chinese news is more).  So I think it is better to take my chips and run before something really bad happen. Like what happened to CCME,TRE .

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Guest Hester

I just bot a little.

 

Assuming you are saying that you now are long the stock, and aren't making a non sequitur about the fact that you just did the robot dance...

 

Please share any of your research that refutes any of MW's claims. Nearly everyone's thesis on this board seems to be "Herb Greenberg interviewed Carson Block for a few minutes once, so clearly Sino is clean as a whistle."

 

I'm just wondering if you have any new insights into where MW went wrong and why Sino is most likely not a fraud.

 

Thanks.

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I just bot a little.

 

Assuming you are saying that you now are long the stock, and aren't making a non sequitur about the fact that you just did the robot dance...

 

Please share any of your research that refutes any of MW's claims. Nearly everyone's thesis on this board seems to be "Herb Greenberg interviewed Carson Block for a few minutes once, so clearly Sino is clean as a whistle."

 

I'm just wondering if you have any new insights into where MW went wrong and why Sino is most likely not a fraud.

 

Thanks.

 

Nothing new - Just I read some scans in Sino's dataroom that support it cash balances and land purchase. May still be a fraud but chances are less than less Friday.

 

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Guest Hester

 

This could really be a big mover in the stock. If Paulson comes out and supports Sino, and even adds, then Sino will soar. If by next 13-F we find Paulson sold out of the Sino position, then, jeez... look out below.

 

Ultimitely Paulson's (and MW's) opinion has no bearing on whether Sino is a fraud or not (meaning only the facts do). But the Paulson position and what he does with it will have a big effect on the stock for sure.

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I do not know if Sino is fraud or not , but I will not buy it for the following reasons

 

It has been FCF -ve for for 2010 and 2009

It has burned cash around 800m in 2010 and around 250m in 2009

It has funded the cash burn by issuance in debt in 2010 and equity in 2009.

 

These are alarming signs for me not from fraud prespective but because they are burning cash year after year.They have huge capex which is funded by issuance of additional debt and equity.

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Lack of cash generation is now MW's biggest offense pt.

The previously comments on sales and asset values are no longer the front runner.

 

But that was known before their report.

 

Yes. The inflated asset value and impossible lumber sales were the couple of the main points in his report. But now he doesn't even comments on those points when Sino shows its proof. But he mentioned he has more ammo and will short it to zero. (didn't disclose how much he were shorting and how much still remain though.)

 

Kind of odd that Sino says the company and its officers can't do buy back... sounds fishy?

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Both. it's because internal investigation as well Q release coming up. I think they are quick to address the two critical allegations.

The others like foreign currency movement and arm-length counter parties are less critical but also harder to prove.

 

I don't have a good feel on MW now after I see his Bloomberg video and after his I will release something pretty soon comment. If he is so confidence, why he plays this kind of game and didn't bother to rebuttal to Sino's documents? After all, he made two big errors on his short report. He sounded like a investment cop helping the little guy saving $ but he doesn't act like one.

 

I am very tempted to build a full size.

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no dog in this fight but:

 

"While Sino-Forest has refuted the bulk of the allegations and has set up an independent committee to investigate them, Moody's is concerned that its financial position and business plan will be negatively affected in the interim, and even if they prove to be unfounded," Moody's analyst Ken Chan said in a statement.

 

are you serious?

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no dog in this fight but:

 

"While Sino-Forest has refuted the bulk of the allegations and has set up an independent committee to investigate them, Moody's is concerned that its financial position and business plan will be negatively affected in the interim, and even if they prove to be unfounded," Moody's analyst Ken Chan said in a statement.

 

are you serious?

 

Moody's is an expert at predicting negative effects after they have occurred.  They need to wait to see what happens in order to accurately forecast.

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Moody for possible downgrade. MW said will release more material "pretty soon".

Sino appoints independent reviewers.

 

Too hard to figure out pile.

 

In the post right above mine you wrote:

 

I am very tempted to build a full size.

 

 

Let me explains - Used to be, my simple mind was thinking whether this is a fraud or not. But now, it's like even if it's not a fraud, what would be the consequence? (as Moody points out.)

Moody's has a point this time. Now if they cannot issue more debt, can they sell their assets easily if they can't roll over their debt? Can they lower their cap-ex to generate cash flow enough?

 

Used to be:

Fraud: 0. (X%)

Non Fraud: back to 20. (100-X%)

 

Now:

Fraud: 0.

Non-Fraud: what would that be? (I don't know how to figure out.)

 

If MW were a bigger firm, then there will be value assign for potential lawsuit... but...

 

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