Covestor model manager Fat Pitch Financials focuses on special situation stocks and is a value investor. George Silva runs the company. He is an economist who did his undergraduate degree at Cornell University and his Masters at Yale University. George has twenty years of experience investing in individual stocks.
Fat Pitch Financials runs Covestor’s Workouts model and on April 18th exited a position in Harbin Electric (NASDAQ: HRBN), a holding company with subsidiaries that design, develop, manufacture, supply and service a range of electric motors, including linear motors, specialty micro-motors and industrial rotary motors. It sells its products in China, but also to certain international markets.
Interactive Brokers recently added HRBN to its list of Chinese reverse-merger stocks that would have higher margin requirements:
The below list of securities represent companies formed via a method known as a reverse merger which, as a result of elevated risk concerns, are subject to increased margin requirements. Note that this list is subject to periodic revision reflecting updates to the list of securities included and/or their margin rate.
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HRBN Harbin Electric
The CEO of HRBN is reported to be planning a bid to take the company private:
Harbin Electric Inc’s chief executive plans to bid on Monday to take the company private and he has lined up the necessary funding, the company said in a regulatory filing on Friday.
Harbin CEO Tianfu Yang along with Baring Private Equity Asia Group, had offered to take Harbin private for $24 a share in cash on Oct. 10 last year.
Concerns about the financing of the deal were raised after the CEO said in a letter to the company in November that Baring’s financing “would be limited to a right, but not an obligation,” to provide up to 10 percent of the financing.
We hope to have commentary from George soon regarding his rationale for this sale.
Sources:
“List of Reverse-Merger Stocks Subject to Increased Margin Requirements” Interactive Brokers, http://ibkb.interactivebrokers.com/node/1721
“Harbin CEO plans to bid for company on Monday” Reuters. 4/15. https://www.reuters.com/article/2011/04/15/harbinelectric-idUSL3E7FF3DH20110415
