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And, With A $2.00 Price Target, The Latest (Alleged) Chinese Fraud Is....
From a just released research report by LM Research:
- China Agritech (“CAGC”, “Agritech” or the “Company”) is a $230 million company that purportedly manufactured and sold $119 million worth of “green” fertilizers throughout China in 2010. In reality, we believe Agritech’s factories are currently all idle and only one out of its four factories produced anything at all in 2010.
- Despite having raised over $70 million in capital since 2005, Agritech appears to have acquired only several million dollars worth of capital equipment. By contrast, it has paid its two founders at least $4 million in rental fees and real estate purchases during that
time. - We have been unable to obtain even one sample of Agritech product, even from headquarters, nor have we found a single distributor or sales outlet.
- Companies Agritech claims as clients, such as the big state-owned fertilizer company Sinochem, deny having any contracts with Agritech. Sinochem has told us that it does not sell any Agritech products.
- Government officials in China told us that Agritech does not have a license to manufacture granular fertilizers, which the company claims are its largest product line.
- We visited each Agritech facility and found each one empty, idle, and without production equipment.
- Agritech’s CFO has been involved in two listed companies before Agritech in which he personally collected seven-figure sums while the companies went to zero. Analysts have called these earlier companies “pump and dump” schemes.
- In early 2010, the U.S. Financial Industry Regulatory Authority (FINRA) lodged a formal inquiry with CAGC questioning insider share transactions.
- Our calls and emails to the company requesting clarification have gone unanswered.
- All evidence suggests that this company has never been a successful vendor of fertilizer and is currently fraudulent.
Adnt the conclusion:
Our careful examination of China Agritech’s business indicates to us that along all parameters, Agritech has grossly inflated its revenue, failed to account for tens of millions of investor dollars, and now has virtually no product in the market. We believe this company should not be listed on NASDAQ. Fundamentally, CAGC is worth no more than the $2 per share cash that is still in the company’s accounts – if insiders don’t empty it first.
Full report:
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And The Latest (Alleged) Chinese Fraud Is....
...Chinese GDP numbers?
...Chinese Inflation figures?
They've learnt well from the Wall Street banksters.
They produce nothing? A Scam?
Yeah, neither does Goldman...yet look at their stock price.
Good point. Proof of which is you have been junked already by a mindless defender of the oligarchs.
Zackly!.. The banking/interest scam must be protected at all costs.. Much like the terrorism scam.. The two most important lies of our generation that rarely see an open, honest and objective debate..
Well, if there are enough gullible investors....
.
Why is this company on NASDAQ in the first place?
Because to list on the NASDAQ, you must pay $5,000 application fee and depending upon the number of issued shares, an additional fee ($100k for 30M shares domestic company). Additionally, a yearly service fee.
NASDAQ has a family to feed too.
Is that Seth Davis i hear? RECO!!!
This company is almost as valuable as the chinese throw away shit americans trade their ben bucks for. Criminals and idiots...the whole damn bunch.
ni hao ..
Question: If one buys puts on a stock and it gets delisted, how is the underlying priced for the purposes of OpEx? Does the underlying switch over to the pink sheets stock?
Long Scam ETF! Join me as we invest by going short scam companies around the world (the biggest untapped bull market of all time!): China, Nigeria, Bangladesh, Khazakstan and US are our fertile hunting grounds. We got any one of 1,000 banks to chose from! Great hedge for frontier investors and sociopaths. Now available: 3X Scam ETF!
Ha ha ha... That's funny. ETF to short scams. Ironically hilarious.
But that's Wall Street in a nutshell isn't it. Scam layered upon scam so deep no one knows what the heck is going on.
Hehe. And our ETF will add another profitable layer
Can I buy a credit swap on that scam EFT ?
I just called, they informed me that they do have one client. The US Congress, they seem to need even more fertilizer and horse shit to help shovel it upon the citizens of this once great country. This should keep the company growing its eps for years to come.
Wait. Is Congress a purchaser or their major supplier of horse shit?
CAGC doesn't seem to be doing very well right now. Man, I'd love to be working for these people. There must be some pretty good money in cleaning up the stock market.
So it is only a buy buy buy rather than a strong buy buy buy,
The words "China" and ".com" are synonymous when it comes to publicly traded companies, just separated by a decade.
If you disagree with this statement, then please contact me about investing in my new venture: pets.china
1999: dot com
2003: derivative
2005: mortgage backed securities
2009: china NASDAQ "companies"
2011 dot.comm bubble
Any idiot who buys Chinese stock deserves it.
WHAT A JOKE!
exactly! Buying Chinese stocks is about as safe as doing business in Tijuana
This is different than buying US derivative products how?
"Any idiot who buys Chinese stock deserves it."
Delete "Chinese" from the above statement, and you're 100% correct
China pumping. What's different?
Jesse Livermore said it best:
"Wall Street never changes, the pockets change, the stocks change, but Wall Street never changes, because human nature never changes"
Even wall street fraud is being outsourced to China
China doesn't need to import fraud or corruption.. It will be the headline someday.. Chinese corruption will be talked about in depth when the truth about it starts to surface.
Humm. . . .
So, what's the big diff between China Agritech vs. Goldman Sucks and JM Morgue?
Answer . . . a few more zeros!
This story reminds me of SUF.
maybe they were really producing plastic rice...
So who is this LM Research???
Their website is new and I can't find anything on them.
http://www.networksolutions.com/whois/registry-data.jsp?domain=lucasmcge...
Huge action in options on the stock, hmmmmmmmmmmmmmm...
Yeah, looks like Zero Hedge got uckfeyd on reporting this. LM does not appear to be legit. The piece was timed with Chinese New Year and in the middle of the night there.
Am I wrong?
Maybe. Can't find any record of LM China Research or possible variants (LM Research, LM*, Lucas McGee, etc) in either the Hong Kong or Singapore company registries (i.e. https://www.icris.cr.gov.hk/csci/cns_search.jsp). Might be under a different name, but given the "About" info on the website, it looks a little patchy.
Also, looks LM China Research's address is just one of those glitzy virtual office fronts. See http://www.hktdc.com/sourcing/hk_company_directory.htm?locale=en&company...
One of his big points is the discrepancy between CAGC's SEC filings and their SAIC filing.
Here's a piece from NY Global Group's President about the SAIC, why it can't be compared to SEC filings and why SAIC filings are pretty much worthless:
http://www.nyggroup.com/library/NYGG-SAIC.pdf
No idea if CAGC is a scam. It wouldn't surprise me if they were, but this weakens LM's argument just a bit. There's also the fact that LM= Lucas McGee, who is massively short CAGC, and appears to be nothing more than some no name dude who started a wordpress blog 3 months ago and has a total of 7 posts to his name.
http://lucasmcgeeresearch.com/
His 7 posts, including this one, are also posted on Seeking Alpha:
http://seekingalpha.com/instablog/765391-lucas-mcgee/135436-china-agrite...
His only credentials are that he is a "full time private investor" and a "colsultant." Super! So what he's really saying is that he has no credibility to speak of, and no online presence prior to Nov 2010.
A quick whois domain search/traceroute doesn't give much info other than the fact that the domain was registered on 10/30/10. Nmap doesn't give much useful info either.
Perhaps someone else can find more info:
IP: 72.233.2.72
Host: 58.2.233.72.static.reverse.ltdomains.com
122K+ sites hosted on that IP though.
>>Here's a piece from NY Global Group's President about the SAIC, why it can't be compared to SEC filings and why SAIC filings are pretty much worthless:
http://www.nyggroup.com/library/NYGG-SAIC.pdf
Thanks for the link - I'll just take it at facevalue and ignore it was authored by Ben Wey. Time to put on more puts. :)
Company response:
"A number of analysts, professional investors, industry experts, and the Company's independent accountants have toured the Company's facilities in the past. The Company has never received any challenges regarding either the existence or the scale of production of its facilities. In addition, management has confirmed that the Harbin facility has never been listed for sale. The sales growth of the Company's organic fertilizers remains robust. In response to the short sellers' allegation that the Company's distribution centers are non-existent, there have already been 10 newly established distribution centers in Henan Province alone. In response to the short sellers' allegation that the Company's subsidiary YiNong does not exist, YiNong in fact is headquartered in Beijing with strong governmental support. In August 2010, the Company announced that it had entered into a strategic agreement with the Beijing Municipal Government to establish within Beijing the headquarters of its nationwide network of distribution centers. In response to the short sellers' allegation that the Company does not have a license to manufacture granular fertilizer, the government-issued production license number for China Agritech's granular fertilizers is clearly marked on each of our product's packaging..."
Pretty weak response. Still trying to figure out how they are doing 23 million a qtr on 6 million dollars of PP&E. Their peers all require higher capex
According to Sydney Morning Herald journalist John Garnaut, China Agritech's share price has been gamed by Hong Kong's Sun Yee On triad, and the company's CFO is not unknown to them. (Skip to 5:48 for his remarks specifically about China Agritech.)