Who buys this stuff? – Guerrilla Edition (JGBO, CCME, KEYP, PUDA, HQS, CRTP, CELM, etc)

The Wall Street Journal recently ran an interview with famed China investor Peter Siris of Guerrilla Capital, in which Peter defends Chinese companies. One of the more memorable passages follows:

To be sure, Mr. Siris says, there are frauds out there. He also acknowledges mistakes, saying a lesson learned over the years is that, if there’s the “least bit” of questionable activity, he won’t “hang around.”

So, your author decided to pull up the most recent filings and take a look at the Guerrilla Capital portfolio. Based on Peter’s portfolio, the definition of “least amount”, “questionable activity” and “won’t ‘hang around'” are Clinton-esque. Here are some of the stocks Guerrilla Capital owned as of the end of March, 2011:

By far the largest holding is 3.3mm shares of Ping Luo favorite Soko Fitness (SOKF). That amounts to over 15% of SOKF’s total shares outstanding and has a market value of over $9.85mm. Touted by Ping Luo, but that is not enough to scare away Siris.

Next up, Peter holds over $6mm worth of Harbin Electric (HRBN) shares. Harbin has been the subject of numerous exposes at The Financial Investigator. It appears all of Roddy Boyd’s work is not enough to dissuade Peter. Perhaps Peter ignores Roddy, because Roddy used to write for the NY Post, and Peter currently pens a column for bitter rival the NY Daily News?

Siris owns 5.58% of Gene Michael Bennett company China Pharma Holdings, Inc. (CPHI). G. Michael Bennett, besides being a reader favourite, has also been the subject of an expose at Businessweek, entitled China Director in U.S. Says Never Mind When CV Proves False. Even this is not enough to get Peter to sell.

OK. How about his 1.3% stake in China Marine Food (CMFO)? Clearly Peter did not read Sam Adrangi‘s reports at Chinese Company Analyst on CMFO.

Perhaps none of these examples reach “least amount” of “questionable activity” status? Well, how does he explain owning shares of China Media Express (CCME)? Or extensively debunked China Sky One (CSKI)?

And finally, there are the stocks where Peter cannot get out, even if he finally woke up and realized that, if anything, there is only the “least amount” of unquestionable activity at these companies. Guerrilla holds a  1.81% stake in halted Ping Luo stock Wonder Auto (WATG), 1.46% in halted Westpark Capital deal CELM, 1.58% in halted China Ritar Power (CRTP), 1.23% in halted HQ Sustainable Maritime (HQS), 0.6% in halted Jiangbo Pharma (JGBO)*, 1.02% in halted Keyuan Petrochemicals (KEYP), and 0.25% in halted Puda Coal (PUDA).

*JGBO features a board member, “John” Yang Wang, with links to both CCME and Xinhua Finances Shelly Singhal. Shelly, by the way, is a recent subscriber to the blog. Welcome Shelly!

The content contained in this blog represents only the opinions of the author. The author may hold either long or short positions in securities of various companies discussed in the blog. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. This blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.
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