The curious bilateral power spikings of Sunpower
It has been long time since I last posted, as I am starting to be overwhelmed by work, family and have literally no free time for other things. Only in recent weeks I have made two transactions: sold my beloved ship @ $1.27 on 12th October, and loaded Sunpower @ $0.38 on 29th October when it was on its plunge... half way (on hindsight). I sold YZJ as I guessed its result would be so-so and hence I am happy to realize my 30% profit.
(Disclaimer: This is not a FA post)
Anyway, the reason I want to write this post, despite my hectic life, is to record recent events on Sunpower, for my future story telling. The tremendous volatility for past 2 weeks has been driven by series of events that are not fully clear as of now.
The breaking down from long consolidation zone could be easily attributed by the selling of employee options since they got it so cheap: $0.116. The only question in my mind was: why now? These options that were granted back in 19th May 2015 could be exercised after 19th May 2017, which were months ago. Even though share price was on a downtrend since peaked in Feb 2017 around $0.8x, they could have still exited in May 2017 around $0.7 for a whopping 600% return, if they deemed the company isn't worth that much money. So I thought maybe some top employees with options are going to tender and hence would like to lock in benefits.
However, the plunge show had not even started. Straight after, Sunpower encountered mysterious negative power spike and dived from $0.45 to $0.28 in 7 days and forced the company to issue a assurance statement on 1st Nov; before throwing in the halt bomb.
Only after so many days of unusual volumes, chairman Guo Hong Xin and ED Ma Ming realized on 3rd of Nov that those volumes are 14mil of their collateralized shares, after almost most of their shares, if not all, have been lelong to the market. And so, Sunpower was halted on 5th Nov, and then on 8th Nov, the lender, America 2030 has been ordered by Court to stop their selling.
(Disclaimer: I don't know these loans work so I am just guessing)
So how much money had them actually loaned? According to Shentonwire's article, These shares were first collateralized in June, where the share price was in the range of $0.5-$0.6. Let's assume it was loaned at the price $0.5, that would make the total loan amount to $7mil; which is about 5-6 times their annual remuneration ($0.75mil to $1.75mil). So what could be the use of these loans for? Most likely for fire-fighting.
Even though 14mil shares is just 1.89% of total shares, and 5% of both chaps' shares; the flooding fire-sale of these shares caused negative spike with amplitude of almost 40%. Such is the amazing X-factor of low liquidity stock.
Thanks to the fire sale, a lot of living legends had made a whopping profit in short duration, or 20% profit in a day; given that Sunpower resumed power today after halt lifted. Seems a sad me to have got in at $0.38 when it dropped to $0.28 just two days later.
Anyway, I entered at a price I deemed with good MOS against business growth couldn't meet performance targets in 2021 and the resulted huge dilution. How on earth I would know it could fall further without bottom magnet? I did had my luck previous round when I sold out my previous batch back in June (EP:0.545, TP:0.605), or else I would be still be in deep water now. So I should not be ruing for not believing my own low-ball estimate.
I shall end the post with a wonderful and positive news after all these boring conspiracies. Let's give a round applause to chairman Guo for winning EY Entrepreneur Of The Year™ 2018 China Awards.
(Disclaimer: This is not a FA post)
Anyway, the reason I want to write this post, despite my hectic life, is to record recent events on Sunpower, for my future story telling. The tremendous volatility for past 2 weeks has been driven by series of events that are not fully clear as of now.
The breaking down from long consolidation zone could be easily attributed by the selling of employee options since they got it so cheap: $0.116. The only question in my mind was: why now? These options that were granted back in 19th May 2015 could be exercised after 19th May 2017, which were months ago. Even though share price was on a downtrend since peaked in Feb 2017 around $0.8x, they could have still exited in May 2017 around $0.7 for a whopping 600% return, if they deemed the company isn't worth that much money. So I thought maybe some top employees with options are going to tender and hence would like to lock in benefits.
However, the plunge show had not even started. Straight after, Sunpower encountered mysterious negative power spike and dived from $0.45 to $0.28 in 7 days and forced the company to issue a assurance statement on 1st Nov; before throwing in the halt bomb.
Only after so many days of unusual volumes, chairman Guo Hong Xin and ED Ma Ming realized on 3rd of Nov that those volumes are 14mil of their collateralized shares, after almost most of their shares, if not all, have been lelong to the market. And so, Sunpower was halted on 5th Nov, and then on 8th Nov, the lender, America 2030 has been ordered by Court to stop their selling.
(Disclaimer: I don't know these loans work so I am just guessing)
So how much money had them actually loaned? According to Shentonwire's article, These shares were first collateralized in June, where the share price was in the range of $0.5-$0.6. Let's assume it was loaned at the price $0.5, that would make the total loan amount to $7mil; which is about 5-6 times their annual remuneration ($0.75mil to $1.75mil). So what could be the use of these loans for? Most likely for fire-fighting.
Even though 14mil shares is just 1.89% of total shares, and 5% of both chaps' shares; the flooding fire-sale of these shares caused negative spike with amplitude of almost 40%. Such is the amazing X-factor of low liquidity stock.
Thanks to the fire sale, a lot of living legends had made a whopping profit in short duration, or 20% profit in a day; given that Sunpower resumed power today after halt lifted. Seems a sad me to have got in at $0.38 when it dropped to $0.28 just two days later.
Anyway, I entered at a price I deemed with good MOS against business growth couldn't meet performance targets in 2021 and the resulted huge dilution. How on earth I would know it could fall further without bottom magnet? I did had my luck previous round when I sold out my previous batch back in June (EP:0.545, TP:0.605), or else I would be still be in deep water now. So I should not be ruing for not believing my own low-ball estimate.
I shall end the post with a wonderful and positive news after all these boring conspiracies. Let's give a round applause to chairman Guo for winning EY Entrepreneur Of The Year™ 2018 China Awards.
安永企业家奖2018中国获奖者 （排名不分先后 ）
科技业
中圣集团董事长 郭宏新
Good analysis... you are in the money now, that's more important :)
ReplyDeleteHaha thanks bro. Yeap it is important. A lot of my holdings are underwater.
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