GEO Investing

benzinga logo

Tired of trading at fraud levels and being manipulated by the market, Chinese reverse merger companies have been taking themselves off the exchanges and going private.

Feihe International (NYSE: ADY), Zhongpin (NASDAQ: HOGS) and 7 Days Holdings (NYSE: SVN) are three of the most recent companies to approach this strategy.

Related: The first part in this series: Determine Legitimacy of Chinese Reverse Merger Firms

Private Equity Perspective

In his exclusive interview with Benzinga, Dan David of GeoInvesting explained these trends, starting with private equity thought processes. “The private equity firm is not going in and saying short sellers were wrong… they’re saying ‘this is not as big a fraud as what they are trading at. They should be discounted to five bucks, but they are discounted to two bucks. Yeah, they’ve committed fraud, but valuing just their assets they’re worth more than two dollars, so lets do it.’”

Read More…