Aaaaannd it’s gone.
“Welcome to the new ‘fake it til you get busted’ normal.”
– China’s Richest Man Sees Half His Net Worth Wiped Out In Seconds After Bubble Stock Instacrash (ZeroHedge, May 20, 2015):
Li Hejun began the day as either China’s second-richest man according to Forbes, or richest, according to the Hurun Report (China’s version of the Forbes rich list) and Le Figaro, with a fortune worth more than $30 billion. By 11am, his net worth was amazingly cut by half, and he was almost $14 billion “poorer” as shares in Li’s flagship Hanergy Thin Film plunged by 47% in Hong Kong before trading was suspended – due to Li’s absence at the company’s annual meeting.
While four months of supercharged stock gains were eviscerated in minutes, it was not a surprise to everyone, as one analysts called Hanergy “a disaster waiting to happen,” noting that the company is working with “unproven” technology and has disclosed few details about the work that underpins its valuation.
It was all going so well, and then…
As Forbes reports, shares in Li’s flagship Hanergy Thin Film plunged by 47% in Hong Kong before trading was suspended at the request of the Hong Kong Stock Exchange…
Li’s absence at the company’s annual meeting in the former British colony this morning was behind the decline in prices, according to some reports, but there was no reason given by the company for the drop. Hanergy said in a statement it would make an announcement containing inside information later today.
Li, Hanergy’s chairman, owns more than half of Hanergy Thin Film. Li has been outspoken in defending the company, saying BU. But as Bloomberg notes, questions have been mounting for a while…
Hanergy uses a niche technology in the photovoltaic industry, where more than three quarters of all panels are based on solar-grade silicon. Thin film cells are more flexible but less efficient than crystalline silicon-based panels.
Prior to Wednesday’s plunge, Hanergy Thin Film’s market value had at one point risen to more then HK$300 billion. That’s larger than Japan’s Sony Corp. and almost seven times the size of First Solar Inc., the biggest U.S. solar company.
…
“It’s an adjustment that the market has been waiting to happen, as Hanergy’s earnings and business performance didn’t support such a high stock price or valuation,” said Gong Siwen, Shanghai-based analyst at Northeast Securities Co.
The Chinese solar company was the subject in January of an investigation by the Financial Times newspaper, which questioned its “unconventional” accounting practices.
The stock “is a disaster waiting to happen,” Geo Securities Chief Executive Officer Francis Lun said today by phone.
Bloomberg New Energy Finance released a report in March saying Hanergy is working with “unproven” technology and has disclosed few details about the work that underpins its valuation.
In a six-page examination of the Hong Kong manufacturer’s operations, the London-based researcher said it’s been unable to find a detailed list of solar-power projects that would help explain why the company’s shares surged in the past year.
Like today’s abrupt dive, Hanergy’s stock rise of 500% in the past year has been surprising to many analysts who said it was long overvalued.
Welcome to the new ‘fake it til you get busted’ normal.
Looks like the US isn’t the only crooked system to have flash crashes…….
China is just as crooked as the US….