Ingram Micro (IM): Leaked Documents Could Jeopardize Buy-Out
by Sonya Colberg, Senior Editor, 12/1/2016 9:43:55 AM
TheStreetSweeper issues an investor alert for Ingram Micro (IM).
Leaked Chinese government documents indicate the $6 billion acquisition of Ingram could be in trouble.
In February, Ingram Micro announced China-based Tianjin Tianhai Investment would pay $38.90 per share cash to acquire Ingram.
But now a Chinese company will not be allowed to acquire a company for $1 billion or more that is not in their core business, suggest new Chinese regulations leaked to the Chinese media.
Under the buyout deal, Ingram Micro would become a subsidiary of China-based HNA Group specializing in logistics, aviation, financial services and tourism. HNA is a major shareholder of Tianjin Tianhai, which focuses on shipping, logistics and financing.
California-based Ingram Micro would be outside the Chinese companies' core business because it is an information technology company.
Below is a partial copy of the photographed document said to be from the People's Bank of China conference record, indicating the central government likely has already passed the regulation on to the bank. It's not perfectly clear whether the restrictions would institute an actual ban or more intensive scrutiny, but the economic issues demand that China reduce its capital outflow:
Translated, the relevant portions state:
This is primarily targeting six types of foreign investments through supervision and control. Filing and approvals are not permitted (unless with the approval of the appropriate departments).
The measures have been approved by the State Council, the Ministry of Commerce, Development and Reform Commission is responsible for the implementation of concrete measures will soon be issued.
Six categories of business include:
1) State-owned enterprises purchase or develop large-scale real estate with Chinese investment of US $ 1 billion and above; large-scale mergers and acquisitions of non-core businesses with Chinese investments of US $ 1 billion and above; and Chinese investments of US $ 10 billion and Of the large amount of foreign investment projects; investment in the amount of 1 billion US dollars (inclusive) or more non-main projects large M & A investment projects;
2. Direct investments of partnerships
3. Purchasing of stocks under 10% of foreign companies
4. Using subsidiaries to acquire foreign companies
5. Chinese investment groups taking foreign listed Chinese companies private
..With regards to existing investment projects which are approved by the National Development and Reform Commission, the guideline mentioned above should be followed.
Our interpretation, along with that of reputable third-party Chinese speakers, is that other government departments must follow the "no filings" and "no approvals" guidelines. The exception would be if undefined "relevant departments" have already approved the foreign investment.
The South China Morning Post states the ban would be effective from now until September of next year.
Since the documents are in Chinese and have just been leaked, we believe very few U.S. investors are aware of the regulations that could doom Ingram Micro's acquisition.
*2. Other Chinese Buy-Outs Suffer
The leaked documents reached the ears of some investors in Changzhou, China-based Trina Solar (TSL), a billion-dollar company which sells solar products to power plants and grid operators.
The company had received a definitive agreement from the parent company to pay $11.60 for each American depositary receipt. Trina called a Dec. 16 shareholder meeting to vote on the merger that would take the company private.
The stock had been trading around $10.33 over the past month but reacted quickly following a couple of tweets Nov. 28 about questions raised by the leaked documents:
... and the price is still down significantly.
Airgain (AIRG): Epic Rise, Epic Decline
by Sonya Colberg, Senior Editor, 11/29/2016 10:45:23 AM
TheStreetSweeper issues an alert for investors of Airgain (AIRG), a recent IPO that is prepared to wipe away a ton of shareholders' stock value.
Investors bought into the wireless network antenna distributor when it first offered its stock to the public last summer. The stock has flown nearly 200% in the last three months.
But now the company is planning a massive follow-on offering. Yes, another stock sale already after the generation of $40.4 million from private stock sales, convertible notes and the IPO. Investors are witnessing the relative calm before the storm of shares hit the market and spark a stock price decline.
Below are TheStreetSweeper's top six reasons this stock is looking to get smashed:
1. No Thanks
Airgain filed a registration statement at 5 p.m. Nov. 23, shortly after most investors took off for the Thanksgiving break.
Airgain will be able to sell $20 million worth of stock, with another $6 million for the underwriters' option. Insiders will also be able to sell $20 million in stock ... and all those proceeds go to those stockholders rather than Airgain.
At the current price, about 2.3 million shares may be released into the market.
(Source: Company SEC filing)
*2. Why This Follow-On Offering Is Dangerous
The price of a stock typically drops after a secondary offering because IPO investors' level of ownership decreases with the increase in shareholder base.
The chart below demonstrates how a seemingly small jump in outstanding shares - from 7.6 million to the new estimated level of 9.88 million - makes a big difference in the early investor's value:
(Source: Company SEC filing, TheStreetSweeper)
Aigain's plans could conceivably change but based on the current situation, Airgain IPO investors' shares could face a jaw-dropping 23% devaluation.
And investors have just been exposed to the possibility of watered down shares ...
*3. Dilution Potential Begins Now
This secondary offering dwarfs Airgain's $12 million initial public offering at $8 per share.
For its IPO in August, Airgain registered 1.5 million shares and locked up another 5.7 million shares plus another 1.05 million in stock options.
Now the underwriter has just released the lockup restrictions, effective after market close Nov. 28.
So all those shares that would have been locked up a couple more months have been set free so those lucky shareholders - including officers and directors - can sell their stock
JAMN Finally Spills the Beans -- And It's an Ugly Mess
by Janice Shell, 6/2/2011 10:32:51 AM
To be sure, the 10-K offered investors little reason to sing. For starters, the filing reveals, this once-hot “coffee company” sells no coffee of its own at all. JAMN relies on a supplier based in frigid Canada – far away from the tropical Jamaican home of its co-founder Rohan Marley – to provide the company with an actual product to sell to its customers instead.
Back in April of 2010, JAMN inked a “supply and toll agreement” with Canterbury Coffee of British Columbia that gave it access to some brew. According to that agreement, JAMN relies on Canterbury to fulfill every role – save a minor one – normally satisfied by a firm that classifies itself as a coffee company. Canterbury purchases the coffee beans. It roasts them. And it then packages them in bags supplied by JAMN – the company’s only real product – for sale to the public.
JAMN signed this deal more than a year ago, right before Shane Whittle – a notorious Vancouver stock promoter – officially resigned as CEO of the company. But the company never mentioned that agreement, seemingly material enough to warrant at least a quiet 8-K report, in a single regulatory filing until now.
Jammin Java (JAMN): Hot Stock ... Bitter Aftertaste?
by Janice Shell, 6/2/2011 10:30:25 AM
It’s time to wake up and smell the coffee! That’s exactly what Jammin Java (OTC: JAMN.OB), a heavily promotedcoffee company, and – for very different reasons – TheStreetSweeper would like investors to do.
Since the beginning of the year, JAMN has miraculously risen from the ashes of the “Grey Market” graveyard to become one of the liveliest – and richest – stocks in the entire microcap arena. JAMN has seen its stock shoot straight toward heaven, soaring from 55 cents to peak above $6 a share on massive daily volume, with its market value nowtopping $355 million despite the company’s limited resources and operating history. (As covered in more detail below, two of the Internet tout sheets pushing JAMN the hardest effectively vanished -- disabled by their Internet servers -- on the day the stock’s trading volume exploded past 20 million shares.)
CCME: Few Signs of Life at 'Healthy' Chinese Firm
by Roddy Boyd, 3/23/2011 9:30:34 AM
Also, and this cannot be understated, hanging out on a sidewalk in Fujian–the sidewalks double as parking spots when the streets, which appeared to have been designed in the Han Dynasty, fill up–was not a viable option. There was also the matter of the world-class headache the Financial Investigator was developing from Fuzhou’s diabolical smell, an epic conflation of poor sewage treatment, air pollution and the smell of cabbage that made getting the hell off Dongjie street a matter of vital importance.
The Financial Investigator and his traveling companion for the trip, an American investor with extensive experience in China, decided to head upstairs despite our interview with the CFO having been cancelled at the last minute (with no explanation given.) We thought a quick tour of the offices and meeting a few other executives might open our eyes to a few things.
Though the language barrier was a little steep with the young receptionist–when we asked for writing paper, she provided Kleenex–we were in short order shown to their conference room and told to wait. It did not escape notice that pride of place in the conference room belonged to a framed certificate of participation from the Fall 2010 Rodman & Renshaw conference, the World Cup for reverse merger companies and the pumpers and touts who peddle them.
Eventually chief operating officer James Yu came down and after spending 30 minutes trying to understand who we were, concluded that giving us a tour wouldn’t hurt. Soon enough, his colleague, Vinne Ye–the chairman’s assistant–came out and took us around.
It was most eye-opening.more...
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