If we were back in the schoolyard right now, I’d probably be chanting something like “Me Chinese, me make joke, me fake filings til you’re broke.”
I was joking around in the blogger faculty lounge yesterday with Joe Fahmy and Tadas about a new ETF that would own all these Chinese fraud stocks. My idea for the ticker symbol was “HALT”. Funny but not so funny, people that don’t know any better are losing real money.
The latest reverse merger Misfortune Cookie is a company called Longtop Financial (LFT), a stock that has now dropped from 32 to 18 in less than a month.
In case you’re too busy, I’ll give you the quick recap – Auditor Deloitte jumps ship with a resignation, the stock spends a few days halted, the cash on the balance sheet is fake, the cashflow is fake, the revenue is fake and on and on. I’d tell you how much money selling insiders have made on LFT except as a China stock that information isn’t readily available. Interestingly enough, this one’s not even Nasdaq, it’s New York Stock Exchange – so much for prestige.
Where will this thing open once trading resumes? I don’t know, but you can use its peers in this shell game as your guide if you’d like: RINO, CCME, ONP, UTA, CAGC, etc. They are all low single digits now or on the pink sheets.
My Red Collar Crime Wave stuff has generated a ton of behind the scenes feedback all week, people are disgusted with this whole thing. Yesterday it was picked up by AdvisorOne Magazine and the emails and calls continue to come in.