ABAT was delisted as of 11/30/2011. The price promptly plunged from just under $1.00 to less than $.40 and I closed out the last of my holdings at $.41 for a significant loss and picked up another 100 shares of CMRG for $3.20 looking to get out at $4.20. I will be reevaluating how I manage downside risk to see if I need to make any changes in this part of my portfolio management.
I owned shares of ABAT until 11/30, then I ran for the door. I’m not recommending buying or selling ABAT
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ABAT filed form 8-K, basically a supplemental or informational filing stating that NASDAQ is taking steps to delist ABAT.
The main reasons stated are:
- Listing Rule 5250(a). The notice states that the Company failed to provide information requested by NASDAQ, specifically cash confirmations from the banks holding the Company’s funds prepared in the presence of personnel employed by the Company’s independent audit firm.
- Listing Rule 5250(c)(1). The notice states that the Company failed to file its Quarterly Report on Form 10-Q for the period ended September 30, 2011.
ABAT does appear to have filed a notice that its September 30, 2011 10-Q would be late. And they have filed a number of late 10-Qs without apparent repercussion.
So what’s different this time? According the this recent letter to shareholders it is the short sellers, the lawyers and a complicit NASDAQ (for believing the articles on Seeking Alpha). The stress of asking for cash balances at the banks has caused top level defections, according to the Chairman, of the CFO and the Controller. Is Chinese culture so different from ours that the Chairman’s claims have merit? Could be. It could also be that there is no cash to verify – which would be bad for all shareholders. ABAT had to meet all the NASDAQ requirements for initial listing on the exchange. NASDAQ had the duty to verify the submitted information and listed ABAT on the exchange. Now the deadline of November 30 looms large.
Disclaimer: I’m holding my shares as I currently have no alternative. I’m not recommending this or any other stock – this is merely a peak into my own behavior.
This reinforces my personal rule that not all my account be tied up in a single stock.
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Trading has been halted on ABAT according to NASDAQ Trader.com for “more information requested”. I’m not sure where that leaves me and my 600 share position in ABAT. I’ve kept my teeth gritted through the ups and downs since April with the idea that I would “average down”. I’m sitting on about a 60% decline in the shares I own. I’m lucky and not so lucky with these shares. If ABAT never comes back to trade and becomes worthless I have no recover alternatives (unless previously threatened class action suits come to fruition) because the shares are in my IRA – meaning I have no taxable losses. Were these shares in a taxable account I would look to see them become worthless to offset other capital gains. The lucky part is that they are not yet considered worthless and since I can’t sell them I guess I’m stuck with them, for now.
Disclaimer: I do own shares of ABAT. I’m stuck in them. You couldn’t buy them right now if you wanted to.
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ABAT has responded to the Variant Research posting that appeared on Seeking Alpha. In the point by point rebuttal, ABAT takes on each allegation made by the short sellers. It also appears that three law firms have filed class action suits against ABAT, although from the initial filings none appears to have acquired their “lead plaintiff”.
For its part, Seeking Alpha has posted a new damning story questioning a $20 million acquisition.
ABAT is up around 14% this morning.
Disclaimer: I still hold shares in ABAT. I have not purchased or sold shares since this story began to unfold, primarily due to having all cash previously allocated. I am still interested in “averaging down” my basis if the opportunity arises. I’m not recommending or selling any stocks.
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EGY finally hit 8.99 on 04/21/2014. Purchase price was 7.55 on 3/22/2013. Total purchase amount was $1142.49 total sale was $1338.48. Simple ROI 17.15% and annual return works out to 15.75%.
So was the purchase worth it? An annual return of almost 16% is not bad but my cash was tied up for a year. There might have been some opportunity costs along the way. This does show that even though I could have cut my losses, believing in the chart and the fundamentals of the company does work out. Of course the results are different from my experience with Advanced Battery (ABAT) but with ABAT, there were indications that some very shady accounting was going on over there in China. I think I wanted to believe that gel lithium ion batteries were a much bigger part of the economy than they really are.
Do your own research, no investment recommendations here, just entertainment and educational value – one hopes
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HMY has taken a bit of a beating as of late, most recently from a George Kesarios in his article, Mining Stocks to Avoid over on Seeking Alpha. It’s not usually a good thing when your holdings get mentioned over there. At least not when my holdings get mentioned over there since they do typically upset the apple (or gold, or battery) cart when they start writing. I can’t say that I can take issue with George’s assessment. Heck, look at the long term chart and you will see a decline in price over the past several years. But what I still see fundamentally is a company showing positive earnings per share and real cash in the form of dividends (I’m not a huge dividend investor, but it’s nice to be “paid to wait”) It has a price to earnings ratio of 10 and that usually tells me that it’s not overpriced – I try to stick with a P/E below 20.
Kesarios states that he believes that Harmony Gold, along with others, failed to cash in on the huge run up in gold pricing (and look at their long term chart – he’s kinda right) and gold is going to completely collapse soon. Whether the gold hoarders or doomsday preppers are done collecting all the gold they ever want is hard to say. Look around. There are so many places here that are buying gold that we could be at the top of the bubble – Warren Buffet says be fearful when others are greedy – or we could be at the start of another run.
I’m holding 300 shares of HMY. I’m expecting the price to go to $7.20 as I posted before, but if it doesn’t happen within the next two to three months it will be time to start looking at selling the calls. Enough calls over enough time recoups the investment and produces a little bit of cash flow, but it also means I’m holding these for a year. I don’t see a total melt down of this stock like happened with ABAT, but one can clearly see an article on Seeking Alpha gets read by a lot of people and prices are definitely affected when they beat it with their keyboards.
I have HMY in my account. Yes I will be holding it until I get the $7.20 price, decide that I can’t wait any more and adjust my price, or collect call premiums for the next year or so. Don’t copy me, you could do just as poorly. This is what I’m doing in my own account. This is for entertainment and educational purposes only. Do your own research and due diligence.
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I closed my 300 shares of VG yesterday at $2.49. Looking at the recent chart that’s where the resistance was coming in and looked to be the most likely price to sell. It did not perform anything like what I originally expected, but I did manage to close it for just over an 8% gain. It took nearly a year to do it too. This is the reason to look carefully at any stock for purchase. If I had not been willing to continue holding VG, I would most likely have lost money. The screeners that I run are supposed to find stocks that have positive value, actually have sales and aren’t losing money as a company. Although the screeners are not perfect, as my trades in ABAT show, they are designed to find companies that are “ok” to hold onto for a long time – if I have to.
Bottom line on VG – and trading – is set yourself some rules. You can use rules that others have come up with if they make sense to you. But set some rules. How much are you willing to invest in each stock? How much are you willing to lose on each stock? When do you cut your loses?
This is what I’m doing in my own account, I sometimes make changes that I don’t write about here – lowering my sale price on VG, for instance. You must do your own research and due diligence. The examples here are for informational, educational and entertainment purposes only. Isn’t it fun watching me lose from time to time?
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I blinked on 1000 shares of ABAT. I just did not feel like I could keep holding a single stock so heavily in my account and I sold for slightly over half of what I paid. This doesn’t mean that I’m completely out, but I just couldn’t hold that much weight in a single stock comfortably. I’m now selling covered calls on what I have left. These are call options on the remaining shares that I hold, selling them on the $2.50 strike, next month out. It’s a long slow way to “recover” from the beating these shares have taken.
On the flip side of this, it doesn’t appear – based on a quick glance at the news – that any attorneys have picked up their needed lead plaintiff yet.
Only time will tell if I blinked too soon or if I will recover my outlay.
This is my own account, do your own legwork and consult your own experts
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I did ride ABAT down, I even bought more shares. I’m in pretty heavy for my account; a little heavier than my own rules say I should be. The question is, with an actual class action filing against ABAT does it make sense to hang on? I don’t know that answer and it gives me pause. First, none of the lawyers offices appear to have an actual “lead plaintiff”. That could mean that nobody has enough of a loss to be considered. They could all be little traders/investors like me. The last time I had a stock (NXG) that nosedived on me, I started trading it at the lower range – then stopped believing in it and wound it down at a 0.91% total gain. I bought and sold it over 15 months. .91% is still a gain, but I could have recovered and then some – .91% is really just a barely recovered. Had that been in a taxable account it would not have even had any gains as I would have had to count my options premiums separately – as it was I counted them as part of my overall gains on the shares. Technically, tax-wise, options are separate sales – in an IRA where they are, today’s gains don’t matter in the same way.
So. I have to watch some more. I try not to trade on fear (my own). Nor do I try to “cut my losses”. I have bought several times on the way down and averaged my cost per share down. I’ve started selling covered calls against my holdings and if I get called out, I have my eye on another stock that has been trading in about a $1.00 range – 8 times in the last six months – that could really ramp up my balance.
I have not gleaned how long these potential suits tend to run and I may be on the losing side of time – but I do have a lot of years to make up for what look like hefty momentary losses. Perhaps I will spend part of that make up time reading the D & O Diary for insight.
I’m in heavy in terms of the percentage of my account. Don’t take what I write to mean you should buy/sell or transact in any way in ABAT.
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I bought 500 shares of ABAT on 3/28. This morning the stock fell off the cliff. This is another Chinese company that is getting hammered on Seeking Alpha. I don’t know if the analysis is right or wrong. I do know that it’s hit my shares for over a 20% loss this morning. I have done OK with ABAT since I started trading it in 2009. I don’t have any problem holding this stock long term through a temporary bashing. Not sure how long this slam might last or if it will Enron on me. So far my inclination is to hold – even through the roller coaster – average my price down like I wrote about with INTC last year if it gets low enough and still looks like a decent stock (to me) and come out on the other end, a little older, a little wiser, and preferably a little wealthier.
Disclaimer: I do own shares of ABAT. I’m not suggesting that you transact in any way with ABAT – that’s on you if you do.
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