If you have been tracking the nightmare that is PUDA you will know that this is just the sort of bailout I’m looking for. My portfolio took a radical hit due to a position in PUDA being completely devalued and then trading halted. This was all due to some unethical and illegal actions by the CEO, which you can read about here.
The interesting development, is that the CEO offered to buy out all of the shareholders at a price of $12. This offer, which was proposed a few weeks ago, I never really too seriously. I’m pretty sure we can’t trust a guy who embezzled half the assets of the company to turn up and give shareholders a 20% return on their investment. I figured it was just a smoke screen to get attention off his actions. Interestingly, it seems to have been taken seriously by the board. They are now proceeding with due diligence as though there is some promise of it actually happening.
Good Trading…
The interesting development, is that the CEO offered to buy out all of the shareholders at a price of $12. This offer, which was proposed a few weeks ago, I never really too seriously. I’m pretty sure we can’t trust a guy who embezzled half the assets of the company to turn up and give shareholders a 20% return on their investment. I figured it was just a smoke screen to get attention off his actions. Interestingly, it seems to have been taken seriously by the board. They are now proceeding with due diligence as though there is some promise of it actually happening.
“Puda Coal Inc announced that its Independent Committee has retained Cowen and Company, LLC and Morgan Joseph TriArtisan LLC as financial advisors in connection with the previously announced proposed preliminary buy-out offer made by Mr Ming Zhao the Chairman of Puda Coal to acquire all outstanding shares of common stock of the Company. In response to the offer, the Board of Directors of the Company authorized the Independent Committee to review and evaluate the proposal and, if appropriate, negotiate its terms and take any other action in connection therewith.It almost sounds like there is something serious here, although I’m still highly pessimistic. You know, if it sounds too good to be true… I’m still considering this a loss, but I have no choice but to hold the shares since trading is halted. For now, I’ll move on and just keep one eye on it.
In a series of conference calls and e-mail communications over the past several weeks with lawyers from Shearman & Sterling, Mr Zhao's legal counsel, the Independent Committee has requested a draft Merger Agreement and information and documentation from Mr Zhao, including documentation relating to all Mr Zhao's transactions involving Puda Coal and its subsidiaries, that will enable the Independent Committee to evaluate Mr Zhao's preliminary proposal.”
Good Trading…
I too have no choice but to hope for the best with this stock. Perhaps Mr. Zhao will try and "save face" with the Chinese Government and the SEC by attempting to make this right. But I'm like you, highly pessimistic ! !
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