February 23, 2010
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RELATED TICKERS: CSKI
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Disclaimer: I am short CSKI puts and I own shares.
Here's the link to where China Sky One Medical (CSKI) announced their compliance with Chinese labeling requirements:
For those of you who hadn't followed the drama, CSKI is a medical device manufacturer in China, and Ultralong had been on record as saying that they were undervalued by about $9 at $16 a share. (That is, they were worth $25, and would provide a ~55% return + earnings growth as it rises to "fair value.") Well, the shares went from about $16 to about $24 and back to about $18, and, having slept through its rise to $24, I had been holding the shares the whole time.
Then the news broke over the weekend that 8 of CSKI's products were mislabeled for sale in China, and various government agencies had issued warnings about them. Again, I slept through that, too. Monday, as investors were trying to figure out what that meant, shares leisurely drifted down to about $14.50 from about $18 on Friday.
Today the company issued an announcement that they are, with the approval of the government, revising the labeling and continuing to sell 7 of the 8 products about which the government had issued its warning, and shares jumped to $16.87, but were undercut by limit sell orders, as volume sextupled its monthly average. So basically, I think shares still look undervalued, but do your own due diligence.
Awesome DD. It's giving investors(like me) who missed the parade on this one, a second chance to get in cheap.
My due diligence here says your long on this one?
I am long CSKI, via shares and negative quantities of puts.