I entered my position in China Energy almost exactly 6 months ago, and yesterday the reverse split was executed which can only mean the money is finally on it’s way to my account. I have mixed feelings about this outcome. I will realize an absolute return of roughly 7.5% which isn’t a whole lot given how long it took, and the fact that it certainly wasn’t a risk-free transaction. My thesis that the initiation of the going private process would only make sense if they indeed wanted to go through with it proved to be correct, but at the same time China Energy must be by far the most sketchy company I have ever invested in.
I doubt that any real alpha was created by participating in this transaction, and I think the easy money has mostly been made in the game of Chinese going private transactions. The majority of the companies that were real (or at least had some value) and had the capability to go private have done so by now. I’m still long WSP Holdings; this position luckily offers way more return potential, but it’s also a hairy situation. Wouldn’t call it easy money.
Technically still long China Energy Corp. until the cash hits my account