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Wins Finance: lose to the winners
The company was founded in 2015 with headquarters in New York, its shares can be traded on the Nasdaq, based on your profile, the company is dedicated to investment and asset management, as well as loans, guarantees, financial leasing for small and medium-sized companies, mainly in China. Thus, for example, if a small company needs a bank loan, the company can act as guarantor in the process, thus helping to cover the financing needs of the companies involved.
Hindenburg published its analysis on June 17 of this year, accusing the lender of moving its share price in highly suspicious ways, such as, for example,
on June 10, its share price rose 758 percent to 151 times volume, with no news.
What’s more, this was not the first time like this, as there was a bigger jump in 2017, when stocks rose 4.555 percent under suspicious circumstances and the company was expelled from the Russell index, but not from the Nasdaq in the end. Unsurprisingly, the stock price collapsed as many institutional investors began to pull stocks, but the company continued to operate. On the other hand, Hindenburg has also visited the company’s headquarters in China, and neighbors say the building has been uninhabited for a year or two. Finally, it also speaks volumes that Wins Finance’s parent company, which already owns nearly 68 percent of the shares, has filed for bankruptcy anyway, is in liquidation, and is delisted from the Hong Kong stock exchange.
At the time of Hindenburg’s announcement, the company was trading at $ 31 on the Nasdaq and has since fallen to around $ 20 a share, losing about a third of its value in three months, and several have been filed. lawsuits and lawsuits against the company. . Much more surprising, in light of what has been described, the stock has fallen just 30 percent so far.
Cool Brands – Netflix for Kids
Hindenburg issued a statement on June 5 describing that they believe Genius Brands shares will fall to $ 1.50 in a month. The statement sounds quite prescient, however the downfall actually happened and the company’s papers are only $ 1.
It is true that instead of the indicated month, the process took a little over two months for the values to see below $ 1.5 at the exchange rate of almost $ 6 on June 5.
But what happened?
Founded in 2011, Genius Brands is an American company traveling in brand management and content services that rotates on the Nasdaq. The company’s programs are mainly for children and teenagers such as Baby Genius or Warren Buffett’s Secret Millionaires Club. The programs are then licensed to other service providers.
The company’s shares rose to nearly $ 8 from $ 1.5 in May after announcing the merger of its two channels, continuing the Kartoon Channel name and significantly expanding its services, which is why many viewed the Genius as the Netflix for children.
Small investors have jumped into the company’s stock, for example, with the number of Robinhood users trading stocks from 5,000 to 140,000.
However, many did not consider that The company implemented several rounds of financing in May, selling rights to 131 million shares (in the form of warrants and convertible bonds) to private investors, which could cause a significant dilution in the following dispositions. Regardless, the company has been at a loss every quarter since 2010. And stocks, as Hindenburg wrote, then fell sharply in the coming months.
SCWorx Coronavirus Testing Agreement – Kamu
The small American company, whose shares can also be traded on the Nasdaq, offers software solutions primarily to healthcare providers. The company announced in April this year that it had signed a high-value deal to buy and resell corona virus tests for $ 35 million a week for the next 6 months.
The company’s share price rose more than 400 percent after the big news.
A few days later, Hindenburg also came on the scene and indicated that they thought the deal was actually a sham, that the SCWorx director did not have an unblemished past, and there were problems with both the supplier and buyer of the evidence. The former allegedly obtains the evidence from a Chinese manufacturer claiming to have no connection to Promedical, which will then provide the evidence as agreed. On the other hand, the alleged buyer of the tests is a company started by a 25-year-old with 3 employees and 3 consultants, so it does not appear that he can pay hundreds of millions of dollars for coronavirus tests. On the other hand, buy and sell tests don’t really cut the profile of a software company anyway.
The US Stock Exchange has also stopped trading at SCWorx for a while, and the stock is currently trading at $ 1.49 and closing at $ 12 after the deal was announced.
The company is under investigation.
Riot Blockchain: Take Advantage of the Crypto Madness
Founded in 2000, the company specializes in cryptocurrency and blockchain mining technologies. According to Hindenburg, the company basically took advantage of the craze for blockchain and Bitcoin technologies to close unprofitable deals, with company executives transferring the company’s cash shares into their own pockets in the form of special dividends.
The allegations included the acquisition of a two-week-old company with up to $ 1.9 million in crypto assets for $ 12 million.
Since Hindenburrg’s announcement in December 2017, the Riot has dropped dramatically from $ 23 and has only traded below $ 5 since then. And in 2018, the former director of the company was accused by the United States Stock Exchange of manipulating the shares, after which he was removed from the ownership of the company.
Yangtze River Port and Logistics: Kamu Logistics Center in Wuhan
Founded in 2009 and previously on the Nasdaq, the New York company focuses on real estate and infrastructure development and one of its main projects was the establishment of a Wuhan port logistics center, which would include offices, logistics centers, direct access to Yangtze River, land transportation and the like.
On December 6, 2018, Hindenburg charged the real estate company that its executives were actually only using the business to extract money for themselves, that there were several pending legal proceedings against them in China, and that most of the Company assets didn’t even exist. The latter means that
The company claims to be building the logistics center on a 1.2 million square meter leased area, however, according to local village leaders Hindenburg interviewed, no such contract has ever been reached.
On the other hand, according to maps obtained from the Chinese government, the area does not exceed 610 thousand square meters, so if they had wanted, they could not have leased so much land.
The company’s stock was still trading at nearly $ 16 at its peak in fall 2017, giving a market capitalization of $ 2.8 billion in addition to roughly 180 million shares (47 million are publicly traded). Hindenburg was announced on December 6, when the stock was already hovering slightly below $ 10.
It was not the most beautiful gift from Santa, at the end of February, in two months, the newspapers had fallen to $ 0.4, down 96 percent.
And since then, the company has been taken off the Nasdaq.and the securities are trading above $ 0.03 over the counter, virtually worthless, and investigations are underway against the company.
Lessons from the stories
Overall, we can see that the Hindenburg has a pretty good hit rate, although of course they also had by-catches where the stock eventually went up a lot. However, it can be seen that the company basically targets those who:
- They have a relatively small capitalization in terms of size.
- They carry out activities in developing countries or are related to them in many cases
- And many times they already have a darker past, either in terms of their corporate activities or in terms of leadership.
Címlapkép: Fairfax Media via Getty Images / Fairfax Media via Getty Images via Getty Images
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