Eratat Lifestyle

Hope the “ I told you so “ contingent does not gloat too much as many are sitting on paper loss, some may be substantial. As for a major shareholder selling out as redflag , strangely there is little or no forum discussion on Dukang Exec Chairman selling all his 44% share recently ? Not vested.

www.nextinsight.net/index.php/story-arch...g-shareholder-dukang

Net cash > 20c???? Why sell at such low price?

Relaxing,

NOt gloating, hope it is just a anti-climax. But the fact that risk increased should be taken into consideration for guys who might not have the trading skills and tempted to try this counter. Please consider all factors.

For existing stakeholders, wish you all the best. I used to do trading for s-chips, I cut loss at 15% for qingmei only to see it raise about 8% the next day, then I swear off trading of pennies. Think relaxing you know what I am talking about as I remembered you went in a day later and emerge a winner. Such is the thrill of trading.

Don't get me wrong, I believe trading has its place in investing, but make sure you have a sound plan. I am sure relaxing has one

Ya I will not touch Dukang too, maybe I used to be vested in Eratat and is still following the development, hence the comments. Dukang fall post announcemnt is not as heavy as I thought it would be, maybe Eratat will recover/stablise after a few days too

New info as posted by Boon at valuebuddies.com:

On 21 May 2009，Ye Sanzhi, purchased 32,175,000 ordinary shares at the price of SGD 0.125 per share.

On 01 June 2009, he became an Executive Director of the Company.

www.eratatgroup.com/v2/files/rele...2May09.pdf

4 years and 3 months later, after 19 consecutive profitable quarters by Eratat, Ye Sanzhi sold off the same amount of shares he owned in the Company at SGD 0.138 per share, resulting in a capital gain of SGD 418,275

Overall, Ye Sanzhi managed to make a positive return on his investment. In addition to the capital gain made at disposal, over this investment period, he also collected dividend payout from Eratat estimated to be about RMB 4.56 million.

Nevertheless, questions remain

1) As an Executive Director (who is also a substantial shareholder) – why would he dispose of his stake in the company ENTIRELY from 6.77% to zero?
2) Why would he cashed out at such a low price (of SGD 0.138 per share) - considering that net cash per share of Eratat is more than SGD 0.20 ?
3) Why would he cash out at this point in time – not long after the successful issuance of the bond and warrant? Interestingly, chargers had been made over shares of Lin Jiancheng under the bond/warrant issuance, but not over shares of Ye Sanzhi.
4) Was this a “rational” or “irrational” behavior on the part of Ye Sanzhi ?
5) What is the probability of an “insider” behaving irrationally with his entire stake (interests) in the company?
6) As an “insider”, does he know something that minority shareholders don’t?
7) Who was at the other side of the trade – the buyer of this off-market transaction?

(Not Vested)

Hi Greenrookie – Giving advice or opinions is not gloating. In fact, different views in a forum is healthy. Agree with you that Eratat’s risk has now increased, as a major shareholder who is also an executive director suddenly sold all his shares at 30% below cash/share, which is illogical.

I have said before that newbies should stay out of speculative pennies or S-Chips as they’d eventually lose. I myself seldom trade them ( only made one such trade on Dukang and 3 trades on Eratat this yr ) as I know I am no match against the syndicates and insiders. Anyway, I only use abt 3 % of my portfolio, hence can walk away anytime if situations change.

I have also said that most retail investors will lose money. Syndicates or financial professionals etc will be big winners. I think this trend will continue, esp in developing countries where corporate governance is poor. Not vested.

Funny how those who had fallen in love with this stock are currently nowhere 'in sight' (pun intended).