August 13, 2008 – stlplace

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Last Updated on August 14, 2008 by stlplace

I felt lucky I did sell some Spreadtrum (Nasdaq:SPRD) shares a short while ago when it exceeded $6 (a quick pop). But I don’t know why I bought some back couple days ago at $4.48. I did not bet on earning these days, but this one had dropped quite a bit from the pop, and the expectation is low. So I thought I am relatively safe. Remember margin of safety.

Well, it turns out semi-conductor stock has no MoF. Remember a while ago the star player nVidia (NVDA) fall out from the graphics chip quality problem? My small speculation player SPRD also fell off cliff. Here is the results.

To be honest, I think 2Q results was OK, but the 3Q forecast is disaster. Quote press release: Spreadtrum currently expects revenue in the third quarter to be approximately US$20 million, which represents a sequential decrease of approximately 50% from the US$40.2 million in the second quarter of 2008.

I am not going to do any fundamental or valuation analysis. It seems to me the management (that means Dr. Wu Ping and his associates) blew up badly on this one. The business itself probablly still has some value, but I lost a lot (blind) trust on management team. So I am going to sell all my shares tomorrow morning. Take a loss 🙁

China Telecom Revamp

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Last Updated on August 13, 2008 by stlplace

Players: foreign investment bankers, Chinese goverment

The motivation of Foreign investment bankers: pump and dump, make money from the warrants (options) in Hongkong market.

Chinese goverment
Goverment usually does not know economy or business, just look at Bush admin you will know. In China goverment plays two roles in telecom revamp: as regulator and as majority owner. This makes the matter more complicated, and it seems to me goverment revamp effort is half-baked, also widely expected. It did not give big surprise to the market and the consumers.

Effectiveness of Chinese goverment policy in the past: telecom revamp in the past; regulatory effort on real estate (so far so failed). Of course we can not read the history book and do the investing. Otherwise all the greater investors will be history major.

Note: I wrote the above a while ago right after China offically started telecom re-org (May 23). I did write about the telecom re-org shortly after May 23, here are some.

New developments