Oh my! Another dirty Chinese reverse merger SPAC deal has been halted this afternoon, AutoChina (AUTC). This is another Jay Srivatsa, of Chardan Capital fame, buy recommendation. As of late March, Jay had buy rating and a $40 price target on the stock. The stock was halted this afternoon at a last sale of $29.19 and a fairly healthy $575mm market cap. Naturally, one can expect both to shink considerably once trading in AUTC reopens. That makes two Jay stocks that in the news this past week. Read about Jay’s defense of Spreadtrum (SPRD) here. And here is a little bit of the awesome contained within AUTC‘s press release:
AutoChina International Limited (“AutoChina” or the “Company”) (NASDAQ: AUTC), China’s largest commercial vehicle sales, servicing, leasing, and support
scamnetwork, today announced that the Company (i) is being investigated by the U.S. Securities and Exchange Commission (“SEC”), and (ii) expects to restate its previously issued financial statements for the year ended December 31, 2009, and subsequent periods to recognize a derivative liability relating to the Earn-out Share Provision (“Earn-out”), which was part of its initial business combination in 2009 (see full description and background of Earn-out at the end of this release).
In addition, during AutoChina’s 2010 year-end process, the Company identified a material weakness in its internal control over financial reporting as of December 31, 2010, due to a lack of requisite internal U.S. GAAP experience, with which PwC concurs. The Company is assessing the situation and working to address the material weakness. No other material weakness has been identified by the Company or PwC to date, but the audit is not yet complete. It is possible that the completion of the audit may result in additional findings.
To which an observer can only response (i) oops (ii) oops and in addition, oops!
Also in the news today, another Chinese reverse merger piece of trash, China Natural Gas (CHNG), the “son of Bodisen“, announced a buy-out by its Chairman at $4.25 a share. Much like Harbin (HRBN) and Fushi Copperweld (FSIN) this “deal” has the fingerprints of Abax Capital all over it…Abax’s own “Donald” Yang Xiangdong sits on CHNG‘s Board of Directors. At last count there are three (HRBN, FSIN, CHNG) announced buyouts of Abax-linked reverse merger pieces of trash. None have been consummated. Can the Chinese Donald and his Abax team not find a single quality company to buy? Not one?