GEO Investing

Call(s) to Action: CREG

Long: None

Short: CREG ($1.27) – On 7/14/2014 we stated “CREG has entered into an equity line of credit with an entity (Ya Global) where it could potentially sell $50 million worth of shares over a 2 year period of time at prices yet to be determined.  We see this equity line of credit arrangement as pumpish in nature.  We believe this tactic has been used by other U.S. listed Chinese companies in the past, LTUS among them, which now trades at $0.01.”  Today, in just an 8k filing, CREG announced that the equity line of credit has been cancelled. As we expected, the stock pumped on the original release on massive volume. The stock rose to high of $2.44 up 55% the day of the announcement.  We will look to re-short CREG if shares go higher.

Closing Positions: None

Here are the stories that the GeoTeam is following today… (Please see full disclosures at bottom)

  • ChinaHybrids
    • GOMO ($6.65) – Announced strategic investment in MobileWoo, a mobile application and internet business based in Beijing and Shenzhen.
    • QIHU ($63.89; marked up to $64.50) – Announced $200 million share repurchase program.
    • KNDI ($12.03; marked up to $12.60 pre market) – Announced plan to launch a car-share program in Nanjing with its brand electric vehicle.
    • VNET ($16.85; marked up to $17.20 pre market) – Announced strategic partnership with China Internet Network Information Center, the government administrative agency in charge of managing domestic domain name registry and other core Internet infrastructure services in China.
    • JRJC ($5.89; marked up to $6.45 pre market) – Announced that it has entered into a strategic partnership agreement with Lianxun Securities.
    • CGA ($2.25) – CGA offered a very non-specific rebuttal this morning to our very specific allegations made yesterday.  They also announced a $1.11M private placement transaction to Mr. Tao Li, Chairman and CEO, at $2.25/share.
  • GeoBargains/GeoBargains on the Radar
    • GeoBargain MOBS ($0.45) has changed its symbol to SCDA.
  • Pump and Dumps
    • WFMC ($0.05) – Watching closely due to $22 million contract announcement released today.  Trying determine shares outstanding.

For more timely information, particularly during the daily trading session, we urge our members to read our message board posts daily.

Disclosure: Long SCDA ; Other Long Positions; Other Short Positions; Pump & Dump Positions (Password GEO2014)

Summary of general highlights:

On the Asian Front

Sungy Mobile Ltd Adr (NASDAQ:GOMO) ($6.65) – a leading provider of mobile internet products and services globally with a focus on applications and mobile platform development (“Sungy Mobile” or the “Company”), announced:

it has made a strategic investment into MobileWoo Technology Holdings Limited (“MobileWoo”), a mobile application and internet business based in Beijing and Shenzhen.

MobileWoo is a mobile internet business that was established in 2010, with a focus on the research and development of mobile applications. MobileWoo’s innovative product team is comprised of seasoned mobile internet professionals who come from strong and seasoned backgrounds. Over the past several years, MobileWoo has introduced many popular products including its hit mobile app Taoshenbian, which has been one of the top five applications on the Taobao open application center platform.

Sungy Mobile has entered into a share purchase agreement on October 2, 2014 (the “Share Purchase Agreement”) with Northern Light Venture Capital II, Ltd., (“Northern Light”), Sina Hong Kong Ltd., (together with Northern Light, hereafter referred as the “Selling Shareholders”), and MobileWoo. Pursuant to the Share Purchase Agreement, the Company will purchase existing Series A and Series B Preferred Shares of MobileWoo from the Selling Shareholders, and certain number of Series B Preferred Shares to be newly issued by MobileWoo, for an aggregate cash consideration of approximately US$8.5 million. Upon completion of the transaction, the Company will beneficially own approximately 46% of the equity interest in MobileWoo. The transaction is expected to close in the near future, subject to the satisfaction of customary closing conditions.

Qihoo 360(NYSE:QIHU)  ($63.89; marked up to $64.50) – a leading Internet company in China, today announced

its Board of Directors has authorized the repurchase of up to US$200 million of the Company’s American Depositary Shares. The share repurchases are currently expected to be made through open market purchases or privately negotiated transactions as market conditions warrant, at prices the Company deems appropriate, and in accordance with the Securities and Exchange Commission requirements. The share repurchases will be funded with the Company’s existing cash reserves and ongoing cash flow. The Company had approximately US$787 million of cash and cash equivalents on its balance sheet as of June 30, 2014. The company also raised approximately $1 billion through a convertible bond offering in August 2014.

Mr. Hongyi Zhou, Chairman and Chief Executive Officer of Qihoo 360, commented,

“We believe share repurchases are in the best interest of our shareholders and represents an effective use of our cash. We expect to continue to generate cash from operations that will help us fund our ongoing business expansion. We remain confident in our current business strategy and our near and long-term growth prospects.

Kandi Technolgies Group (NASDAQ:KNDI) ($12.03; marked up to $12.60 pre market) – announced:

that the Kandi-brand SMA7001BEV pure electric vehicle passed the Nanjing local inspection for the licensed plate at the end of September.

ZuoZhongYou (Nanjing) Electric Vehicle Service Co., Ltd. (“ZZY-Nanjing”), a wholly owned subsidiary of Zhejiang ZuoZhongYou Electric Vehicle Service Co., Ltd. (“ZZY”, which the Company indirectly owns a 9.5% ownership interest through its joint venture) has obtained the registration approval from the local State Administration of Industry and Commerce for the formation of ZZY-Nanjing. Upon the completion of the ancillary procedures for ZZY-Nanjing’s establishment, the Car-Share Program will be officially launched in Nanjing.

Located in Eastern China, Nanjing, the capital of Jiangsu province, is about 300 kilometers or 186 miles from Shanghai in the northwest, and is one of the national renewable energy automobile pilot cities. Furthermore, both Kandi’s SMA7000BEV and SMA7001BEV models are eligible to receive not only the national government subsidy of RMB 47,500.00 (Approximately USD 7,738.00), but also the local government subsidy of RMB 47,500.00 (Approximately USD 7,738.00) from Jiangsu provincial government and Nanjing municipal government combined.

21 Vianet Group (NASDAQ:VNET) ($16.85; marked up to $17.20 pre market) the largest carrier-neutral Internet data center services provider in China, today announced,

a strategic partnership with China Internet Network Information Center (CNNIC), the government administrative agency in charge of managing domestic domain name registry and other core Internet infrastructure services in China.

Pursuant to the agreement, 21Vianet and CNNIC will closely cooperate on conducting fundamental research and developing an open Domain Name System (DNS) Internet platform in China. By sharing resources and complementing capabilities, the two parties will explore strategies to further expand and optimize China’s internet infrastructure resources, such as Internet Protocol (IP), Autonomous System (AS) and DNS. The two parties will also jointly establish an Internet Collaborative Innovation Alliance to promote a safer, more open and more vibrant Internet infrastructure network throughout China, with the ultimate goal of improving Internet services and better supporting China’s Internet economy.

Speaking at the announcement ceremony in Beijing, Professor Lee Xiaodong, deputy head of CNNIC, stated:

“We are excited to partner with 21Vianet, which shares our vision and ambition to enhance China’s Internet infrastructure. We look forward to leveraging the expertise and technical capabilities of 21Vianet in further expanding our areas of collaboration.” Professor Lee also stated that CNNIC and 21Vianet have had a long history of cooperation and CNNIC highly values the contribution that 21Vianet has made to China’s Internet infrastructure industry.

Mr. Josh Chen, Chairman and CEO of 21Vianet, added:

“We are honored to form this important partnership with CNNIC. As China’s internet traffic continues to witness exponential growth, we believe 21Vianet is in a unique position to help facilitate the design, deployment and optimization of the next generation Internet infrastructure in China. Building upon earlier work related to key network issues facing China, today’s strategic agreement represents a higher level of partnership between the two organizations going forward.”

China Finance Online (NASDAQ:JRJC) ($5.89; marked up to $6.45 pre market) – a leading web-based financial services company that provides Chinese retail investors online access to securities, commodities and wealth management products, today announced,

it has entered into a strategic partnership agreement with Lianxun Securities Co., Ltd. (“Lianxun Securities”). To date, China Finance Online has signed trading integration arrangements with eight securities firms, with CITIC Securities Co., Ltd. and Zhongshan Securities Co., Ltd. already gone live. All of these brokerage firms are regulated by the Chinese Securities Regulatory Commission.

Mr. Zhiwei Zhao, Chairman and CEO of China Finance Online, commented,

“We are excited that our leading securities-trading platform, Securities Master, is being integrated with a growing number of Chinese securities firms and continues to gain traction in China. We believe this success demonstrates the superior technical innovation and capital market and online brokerage experience that underlie our ability to make online brokerage services in China a reality. Looking ahead, we will continue to leverage our unique advantages and forge win-win partnerships to build an investment ecosystem in China that offers beneficial investment services to China’s growing population of retail investors, and support our ability to expand our market-share and generate returns for our shareholders and partners.”

On the U.S. Front…


B- Scada (OOTC:MOBS) ($0.45) — GeoBargain MOBS develops software products for the visualization and monitoring of real time data in heavy industry worldwide.  Announced symbol change from MOBS to SCDA effective today.  Quote from management:

“B-Scada changed its name in October 2012 to more easily identify our industry niche and increase accessibility on the internet,” said Ron DeSerranno, CEO. “We’re now taking the next step in brand recognition by aligning our ticker symbol with the company name.”

Pump and Dumps…

Wham Inc (OOTC:WFMC) ($0.06) – Watching closely due to $22 million contract announcement released today.  Trying determine shares outstanding.  The company announced:

that P2P has formally finalized and successfully consummated the 5-year contract with Digital Taxi Tops, LLC. (an Ad-Technology division of BELL TRANS, Inc.), valued at the minimum of $22M including a royalty-type residual revenue stream per vehicle per each month; successfully reaching another investment objective milestone outlined in its mission statement of the investment portfolio. With a minimum of two other major US Taxi Operators interested in coming on board, the overall value of the project, including all contractual residual-revenue components, is estimated to exceed $45M during its initial contract term of 5 years.

For more timely information, particularly during the daily trading session, we urge our members to read our message board posts daily.


The GeoTeam

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