New Rumors?

[M1DD]

"Their complete silence simply doesn't make any sense given their story of "we hold a lot of shares" and "DD in China was great and make us more confident than ever." I think it's wholly unfair to insinuate anything negative about Toro. First of all, they don't have any responsibility, fiduciary or otherwise, to keep everyone updated on their findings, nor do it on anyone's timetable but their own. What's more, before questioning their agenda or posing negative conjectures simply because they haven't posted an article detailing their dd, why don't you simply email them for a status report?!? GL

This is persicely what I have just done.

[kevinh]

"Their complete silence simply doesn't make any sense given their story of "we hold a lot of shares" and "DD in China was great and make us more confident than ever." I think it's wholly unfair to insinuate anything negative about Toro. First of all, they don't have any responsibility, fiduciary or otherwise, to keep everyone updated on their findings, nor do it on anyone's timetable but their own. What's more, before questioning their agenda or posing negative conjectures simply because they haven't posted an article detailing their dd, why don't you simply email them for a status report?!? GL

How many longs have been touting Toro's DD as the beacon of light against MW? As for the timetable for a report, they are the one's that posted the following on Nov 26th:

"We just completed our DD yesterday. 3.5 weeks, six cities, over 30 meetings with channel partners and ecosystem players across the value chain. All confirmatory of our initial conclusions, with several notable positives we had missed previously despite having done quite a bit of work. More to come on this when we get a chance to organize our thoughts. The meeting with the government (MIIT) was most enlightening."

I'm hedged to not experience any losses up until $12.30 with options, but given how many longs there are on this board who didn't hedge, I can't be the only person to question what's going on.

[Bondguy8]

But posting something positive makes it easier to unload. You get buyers to line up and you sell to them. Volume since their note has been enough to easily unload 1.5M shares, and this fund is small enough that they don't have to file anything when they enter/exit a position. As for reputation, I don't know why it matters to a small hedge fund. Their complete silence simply doesn't make any sense given their story of "we hold a lot of shares" and "DD in China was great and make us more confident than ever." If this is the case, they would want to publicize their findings. And not to mention, the price movement is getting very ugly. There were some decent sized blocks selling today.

Relying on Toro to release their findings publicly could be a bit of a flawed thesis.  Why do they need to release to the market what they know?  They are not a sell-side shop that must publish research to earn revenue (or buy-side participants paying them back for their research).  If Toro was reducing their stake you would find out if they drop below the 13G thresh hold in due time.  The name of the fund is slipping my mind at the moment, but we have already seen a fund accumulate enough of an ownership stake that they had to file a 13G and then sold their stake and had to file the selling of their stake.

Also, what if Toro came across material non-public information and is now restricted from trading or releasing info to the public.  I think it is more plausible that Toro came across some information and is not allowed to deciminate the information publicly.  I think as has been mentioned here many times, its all jockeying till we get the audit results.  Is it possible that someone is selling with insider information out of China?  Sure its always possible, but there are a lot of reputations on the line and two days of illiquid trading doesn't change much for me.

[admin]

Wise words, bondguy, thanks for that.

[kevinh]

But posting something positive makes it easier to unload. You get buyers to line up and you sell to them. Volume since their note has been enough to easily unload 1.5M shares, and this fund is small enough that they don't have to file anything when they enter/exit a position. As for reputation, I don't know why it matters to a small hedge fund. Their complete silence simply doesn't make any sense given their story of "we hold a lot of shares" and "DD in China was great and make us more confident than ever." If this is the case, they would want to publicize their findings. And not to mention, the price movement is getting very ugly. There were some decent sized blocks selling today.

Relying on Toro to release their findings publicly could be a bit of a flawed thesis.  Why do they need to release to the market what they know?  They are not a sell-side shop that must publish research to earn revenue (or buy-side participants paying them back for their research).  If Toro was reducing their stake you would find out if they drop below the 13G thresh hold in due time.  The name of the fund is slipping my mind at the moment, but we have already seen a fund accumulate enough of an ownership stake that they had to file a 13G and then sold their stake and had to file the selling of their stake.

Also, what if Toro came across material non-public information and is now restricted from trading or releasing info to the public.  I think it is more plausible that Toro came across some information and is not allowed to deciminate the information publicly.  I think as has been mentioned here many times, its all jockeying till we get the audit results.  Is it possible that someone is selling with insider information out of China?  Sure its always possible, but there are a lot of reputations on the line and two days of illiquid trading doesn't change much for me.

Because they said they would? If someone says one thing and does another, I get suspicious. And as far as I know, Toro does not need to file 13G given their AUM is a little over 30M and hold less 5% of the shares outstanding.

[quantumvibes]

"Because they said they would? If someone says one thing and does another, I get suspicious." Because they haven't published a comprehensive report after just 2 weeks (with a holiday in between) of a 3.5 weeks on-the-ground dd trip in China?!? What would be the rush for them? They've already signaled their findings are positive. Could it be they have other responsibilities, as well, to catch up on following nearly a month out of the office besides just keeping retail investors apprised of their dd ? Could it also be they're waiting on the FL Mobile apps issue to be resolved or some other item hanging fire before releasing an article ? As a long-term investor who has repeatedly said publicly they are positive on NQ, why would they feel any need to rush a report out the door? I think if anyone deserves the benefit of the doubt it's Toro!

[Bondguy8]

But posting something positive makes it easier to unload. You get buyers to line up and you sell to them. Volume since their note has been enough to easily unload 1.5M shares, and this fund is small enough that they don't have to file anything when they enter/exit a position. As for reputation, I don't know why it matters to a small hedge fund. Their complete silence simply doesn't make any sense given their story of "we hold a lot of shares" and "DD in China was great and make us more confident than ever." If this is the case, they would want to publicize their findings. And not to mention, the price movement is getting very ugly. There were some decent sized blocks selling today.

Relying on Toro to release their findings publicly could be a bit of a flawed thesis.  Why do they need to release to the market what they know?  They are not a sell-side shop that must publish research to earn revenue (or buy-side participants paying them back for their research).  If Toro was reducing their stake you would find out if they drop below the 13G thresh hold in due time.  The name of the fund is slipping my mind at the moment, but we have already seen a fund accumulate enough of an ownership stake that they had to file a 13G and then sold their stake and had to file the selling of their stake.

Also, what if Toro came across material non-public information and is now restricted from trading or releasing info to the public.  I think it is more plausible that Toro came across some information and is not allowed to deciminate the information publicly.  I think as has been mentioned here many times, its all jockeying till we get the audit results.  Is it possible that someone is selling with insider information out of China?  Sure its always possible, but there are a lot of reputations on the line and two days of illiquid trading doesn't change much for me.

Because they said they would? If someone says one thing and does another, I get suspicious. And as far as I know, Toro does not need to file 13G given their AUM is a little over 30M and hold less 5% of the shares outstanding.

They filed...

http://www.secinfo.com/d12TC3.x1Qm8.htm

[kevinh]

They filed voluntarily, but didn't need to file. My understanding is that they can sell any time without having to show that they reduced their stake via 13G.

[tradestar2012]

Maybe SA thought Toro's report did not add to the conversation so no part 3? J/K. Not even SA would be that biased... or would they...

Lets put things into context. MW has not released a "report" since 11/12/2013. That report by MW was not even worthy of a response as it was a personal attack on management, not on the company itself. Since that report, all the subsequent short reports have been by armchair analysts who have regurgitated the same argument over and over again. At the end of the day, all these short articles are really just noise. Toro may have sold their stake, who knows. They may be trading in and out of NQ for all we know. Shoot, they may even be accumulating a major short position and waiting to release a damaging report. All of these are possibilities and part of the inherent risk in investing in a stock like NQ. While a positive report by Toro would be ideal, the most important thing today is the company continuing to operate as usual. There have been no unanswered inquiries, no management or board resignations, no auditor resignations, earnings came out on time, the analyst day was well attended, and the annual general meeting is going forward as usual. Those are the only important variables from 10/24/13 to the results of the audit. Even the most diehard short supporters will agree that none of the back and forth banter matters until the audit is out.

If and when Toro is ready to release their report, they will. Until then, you can either choose to rely on your own DD, write your own article and hope the SA editors like it, hedge your investment or sell and move onto a different investment. In fact, I would encourage everyone who has an opinion to write an article. The journalistic specifications as to what SA accepts as newsworthy seems to be fairly wide-ranging. Based on what I've seen most recently, just slap a "Capital or Fund" after your name and I'm sure whatever you write will get fast tracked to getting published.

[roxron9]

Helps to keep the shorts scared too, given the amount of work Toro has put in and the level of their work is far more credible.

There is a reason why MW had to write abouut Toro in their report.

Keep your cards close to the chest.