RE:Mr Xie's sellingI choose to think the moves of Mr Xie are rational. He is the backbone of the two Q factories in China. Before the European tariff mess, Mr Xie likely thought that in addition to making money with his 13M shares of Q (whose main asset is its intellectual property), he could also make lots of money with the manufacturing through his factories in China. With the tariff instituted, Q rationally decided to not proceed with that second factory. Q rationally decided to more actively take the product to other parts of the world. However, most of those locations also have tariff issues, therefore Q business plan had to evolve such that Q products could eventually be manufactured in non-China locations where the tariff wouldn't be a barrier.
No such non-China manufacturing could reasonably occur in any significant way before certification of the products. Q doesn't have the working capital and networking of a tier 1 company to manufacture and distribute the products in a big way even if they had the UL certification. It seems obvious Q will need to team up with some tier 1 company that has that capacity. That could happen in multiple ways: a buyout of Q, a buyout of Q's IP, a buyout of just the solar panel rights, a distribution agreement, etc.
It seems the distribution agreement approach is exactly what is happening with the specialty products. Perhaps that is because they can continue being manufactured in China and not be subject to the same import tariff as the solar panels. I am interested in hearing eventually how the earlier announced $450K of specialty products did regarding import tariffs. If exempted from the tariff, then the China factory is looking good. If not exempted then the writing is on the wall that even these specialty products will need some non-China source. Could this be what is motivating Mr Xie?
Like I say, I assume Mr Xie is acting rationally and not vindictively. Perhaps he now thinks his allignment with Q will no longer make him lots of manufacturing money in China. In those circumstances, perhaps he just didn't want $10M tied up in Q. That is the type of personal reason atika is referencing. It is called opportunity costs.
Folks, don't misunderstand me. I have no inside track on why Mr Xie has sold another million shares in the past two trading days and has sold over 3.6M shares since June 2014. I just choose to speculate that he is acting rationally in his own self interest. The fundamental economic principle is that individuals rationally pursue their own self-interests to maximize their utility. That is a true principle of economics. We should be grateful that Mr Xie almost single handidly carried this company financially to the point of certification. He still has about 9.6 million shares and he now wants to reduce his holdings. I just wish that Q could find some way to transfer the bulk of his shares through a private sale as opposed to dragging it all through the public market. If a privat sale can't be arranged before UL Certification, I think Mr Xie's remaining shares will more easily be bought out then in a private sell.
We must always remember the intellectual property, once UL certified, will be the main asset of the company and if the value of that asset isn't reflected in the s/p (due to the major shareholder trying to sell mass shares to get out), the value of that IP asset will not be determined by s/p, but rather, by the fair market value of the asset to the buyer.
Further wild speculation as to what is motivating Mr Xie to sell is not helpful. I agree with rG's last posted comments. Q now has the safety certification and they claimed in the last n/r that Q "expects to be advised" of further UL certification results. That sounds optimistic. I believe the UL certification will come. However, given the limited working capital, I hope it comes sooner rather than later, because it will open up doors for financing, for buying out Mr Xie, and launching Q from obscurity and into the solar panel limelight.