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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Mr.Sepio who wrote (53268)	1/30/2014 2:33:38 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78748

Assets get transferred to insiders through private deals between the insiders and the company. Insiders or relatives of insiders become preferred suppliers. Company buys assets or businesses of insiders or of insiders' relatives. Institutional money is not necessarily smart money. Sometimes these institutions hold shares because they have had financial dealing with the company and got options/stock in return for providing promotional or marketability of the stock. You do what you will. I suspect you won't convince many here though that this is an undervalued situation that is safe and cheap. Jmo about the stock, although I've been wrong many, many times.

To: Mr.Sepio who wrote (53268)	1/30/2014 4:42:21 PM
From: Jurgis Bekepuris	1 Recommendation Recommended By Spekulatius Respond to of 78748

can you please explain how it could be for the insiders' benefit? Simple: companies spend money on overpriced stuff from related parties. In case of SPU, you might want to investigate where they spent $38M that's listed as "Prepayment for other assets ". What assets? Are those real assets or are they just CEO's uncle's farm's goat shed? See Cash flow statement in 10Q. And that's still assuming you can trust their 10Q. Maybe that was fake cash used to buy fake assets? Unless you go there and touch the goat with your own hands, you can't be sure. Even if you go there and touch it, you still can't be sure, because the goat might have been borrowed just for your visit. Disclaimer: I have made a bunch of money on Chinese co runups. I lost a bunch of money when they folded. I still hold shares in CYOU and tiny bit of GAME that have their own governance issues but are unlikely to be frauds. All this is documented in this thread if you search for it and follow the questions and answers around 2010 time frame.