1. Traps of listed companies
Ripping off small investors
(向下炒)

2. NAV Defines as A proxy to estimate how much a share of stock is worth
NAV<Spot price Overpriced
NAV>Spot price Underpriced

3. Pitfalls and traps of NAV
Pitfalls I: Owners will not sell out their shares at a price below NAV value, say $1
Traps: Some capital-concentrated companies continuously sell the shares to pull down the share price, say from $0.9- >0.8->0.7…..

4. Pitfalls and traps of NAV
Pitfall II: Considering the huge gap between NAV and spot price, investors think the stock is good even if the spot price keeps dropping
Traps: Main owners will stop selling the stock at some point, say $0.25, so as to prevent losing control of the company, but doing something harming the investors instead

5. Tricks usually adopted
When the share price is at the lowest point, say $0.25
Private placement: issue new shares, say @ $0.2, to non-current share holders. New buyers are usually agents or current owner’s relatives
Gain the gap from $0.2 to $0.9!!!

6. Ultimate Hit Privatization
Using a price a little bit higher than the spot price to compulsively buy back all the shares
Use $0.3 to buy back the share that is worth NAV$1

7. Practical case -8079
BAL LTD (變靚D控股)
Private placement or rights issue

8. Practical case- 8395
BLU SPA-20000
Privatization

9. Features of such stock
Spot stock price is well below the NAV even in superb bullish market
Shares are unreasonably concentrated on a single party or some groups of families

10. The end