GREY:BYGRF - Post by User
Comment by
aeeon Oct 30, 2014 8:47pm
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Post# 23079766
RE:RE:RE:Boyuan needs their investors behind them ..
RE:RE:RE:Boyuan needs their investors behind them .."Faith" may make you feel good, as you are being scrificed to the market gods, but it will not make money. As I mentioned before, the bottom line is that:
1) The company in which you own shares (Bouyan Construction Inc (BOY) ) DOES NOT OWN the chinese construction company which it includes in its financial statements. It just has an agreement with the shareholders of the chinese company (who were given shares in BOY in return). BOY HAS NO VAUE if they are not able or willing to realize the benefits of that agreement.
2) Both BOY and the chinese company are majority owned by the same individual. If he decides a public listing in Canada is not to his benefit, he has complete control of BOY and can just annul the agreement. Not nice, but it has precendents with other chinese companies.
This is about the only stock you can buy where the Chairman can simply decide to take the entire company away from you when he feels like it. Until that risk is gone, the stock will be priced appropriately.
BTW, I still have some (shares and debentures) and am holding to see what Mr Chairman will do. The market clearly thinks there is a better-than-even chance that somehow BOY will end up dead, even if the Chinese company flourishes. Shou has little incentive to kill BOY at this point (other than TSX listing expenses), but he may tire of the TSX soon. That may happen when the TSX decides to push BOY to the venture exchange. He has a mixed track record to date, given the OSC problem with the questionable loan a couple years ago. On the other hand, BOY did pay off the last debentures, so there is some demonstrable legitimacy here. BOY isn't going to get investor "faith", but investors make re-evaluate the odds after BOY pays off the remaining debentures.
There is a slim chance that he will still find a source of capital that will drop his position in BOY to less than 50% without diluting it at current prices. Or maybe he will find a way to get cash out of China legally, to pay off the debentures and initiate a dividend. Or maybe he will be abducted by aliens. WTF knows.