Monday, June 13, 2011
If Ms really belieaved in yongye why the onerous conditions?
For the people buying in yongye thinking Morgan stanley involvement is hope that the company is real, regardless of history of repeating itself. Where the same investors who kept the faith in chinese media express, because hank greenberg was involved, and kept on buying. Their motto was why would hank buy into a fraud, so it must not be a fraud. As we all know now it was a fraud. Even with all his experience and having dorothy dong an experienced china investor on the board, it amounted to nothing. As I mentioned before on ccme, hank had all the same protections, as morgan stanley. Except in the end, they werent able to extract their money out of the company. Now onto Yongye, and morgan stanley. If morgan stanley really belieaved this was an extraordinary company, why would they cover their ass, by putting in so many fraud protection measures. in the case of fraud, Morgan will not only get their money back, but with 30 percent interest, and if was a minor fraud they will get their principal plus 20 percent back. http://bit.ly/iDxcKm This includes a whole host of post closing requirements, where they have to open the mine by the end of the year. and if not Ms can get their money back plus 20 percent and earnings where they have to be 120 percent higher then the previous year. http://bit.ly/lROGcp If morgan stanley really belieaved it wasnt a fraud and they have done indepth research, why is this deal done so that they are the first tobe paid plus percentages more, ahead of everybody else. And why is everything structured, so that they are protected in case of fraud. As in the case of of chinese media express, the smart money thinks they have their bases covered, till reality sets in, its not easy getting your money back. Why do I keep harping on this, it's because people do not learn from history. It was only 3 months ago people were going crazy because they said the only reason they invested in ccme was because of greenberg, he was smart money. As I describe in a previous post, indepth research in china especially with private equity is completely diffrent from here in the west. It depends on relationships, guanxi rather, then traditional western ways. I am not going to rehash all of the obvious concerns and red flags, other investors have posted them here http://bit.ly/ih32Ql and here http://bit.ly/kHkOl0 . An obvious red flag that homer sun doesn't know whats going on is his from his own comments " In addition to product efficacy, we are impressed by the Company's strategy and execution to develop an effective sales network directed at an underpenetrated segment of Chinese demand." http://bit.ly/j7T5Ys Really, they are selling a product that is underserved, fertilizer is one of the most competitive markets in china. And at last measure they have over 500 compeititors in china thats according to their latest 10k. http://bit.ly/hxdvVx And then dont people find it wierd the ceo is now buying 3 million dollars worth of shares, after he paid 3million dollars to a mysterious hebei distributor that we still dont know who it is. http://bit.ly/lqEyJH In the end nobody here should be angry if history repeats itself, they were warned, and nobody should be angry at Morgan stanley, they were warned.
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