QXM/XING: I am probably wrong

Originally my thesis for investing in these related stocks were:

  1. It’s undervalued.  (Unless it is a fraud.)
  2. Insiders will try to inflate earnings and to promote the stock.

I am probably wrong on both counts.  As far as promoting the stock goes, investor communication has been terrible (e.g. website not updated in ages) and insiders have not responded to Shah Capital Management’s letter to the board.

As far as undervaluation goes, the stock will likely ultimately be a zero if insiders are intent on stealing (almost) everything.  The mining companies that were merged into XING may be a fraud considering Riu Lin Wu’s history with Real Gold (see posts on chinaminingblog.com).  QXM hasn’t released new models of cell phones in a long time and there is little information on what happened to its VEVA stores.  I don’t believe that QXM has a cell phone business that is really operational right now.

So unfortunately for my net worth, I was incredibly wrong on these stocks.  Perhaps there is some residual value in these companies from cash that hasn’t been misappropriated yet.  I suppose I will find out when these companies undergo forensic audits.

Advertisements

One thought on “QXM/XING: I am probably wrong

  1. Pingback: Portfolio update November 2014 | Glenn Chan's Random Notes on Investing

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s