Often Partisan

Postcards from HK: Share Dealings

Since the resumption in trading in Birmingham International Holdings shares on February 7, I think a lot of people have paid attention to the price fluctuations of the stock. After seemingly steadying at around HK$0.27 the share price has tracked steadily back downwards closing at HK$0.20 today.

There has been all kinds of rumours out here about the stock; most of which I cannot publish due to their potentially libellous nature. What I can say is that after an initial rush by some to sell their shares there was a clear rally and it does seem that some people had confidence in BIH executives who had told shareholders that they foresaw a “bright” future for the company.

Yesterday, a next day disclosure form was filed which stated that 333,333,333 of the first convertible bond shares had been taken up on February 21. Without the relevant filing made to the stock exchange by Yang Yuezhou it’s impossible to fully confirm what he has done with those shares (which would make up a 6.08% stake in the company) but looking through the stock graphs for the company since then there is no evidence he has sold them off in one chunk. Whether Yang intends to (or indeed has) held onto the shares is as yet unknown.

Last Monday, Tuesday, Wednesday and  Thursday Carson filed notices to say that he had taken a short position on 28.5M shares, 35.892M shares, 40M and 40M shares respectively. This doesn’t mean he has sold those 144.392M shares – as the shares come under the restraint order he wouldn’t be allowed to. What he has done is “rented” the shares out – literally lent them to someone or something else – potentially in order that they can cover their own “short” position – and as part of that he will eventually have the shares returned to him at a later date.

Obviously the big question is what this all means for us Blue fans. I will freely admit I’m not trained in accountancy or stockbroking so I’m struggling to interpret it all – indeed I think there is a danger we can over analyse this and come to conclusions that aren’t there. At this moment in time I think that there isn’t any conclusions for us to come to; at this moment in time things are very much as you were at BCFC and will remain that way until there is a firm announcement to the stock exchange that Beijing Liangzhu (or anyone else for that matter) have ponied up the required dough to make an investment in the club. From what I have heard Carson’s focus is very much on Friday – whilst I think his potential incarceration won’t affect Blues much in the short term it certainly will affect him.

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56 Responses to “Postcards from HK: Share Dealings”

  • Graham says:

    Why is CY shorting his own stock, my understanding of taking a short position is you’re assuming the stock will fall in price

  • Cyprus Blue says:

    I am confused by what Carson is doing here. As I understand it his assets are frozen, so I would have thought there cannot be any type of movement. He could be stock lending, which would mean he has received a premium that would allow someone else to short the stock (doesnt mean he believes the stck will fall, in fact the opposite.) or he has borrowed against them either directly with a bank, and they have had the shares as collateral ot by using other derivatives that mean you dont sell the shares, but take a long term option on them, and receive a premium. I cant see how any of these are possible though without being allowed to by the authorities. They may have allowed him to do so to pay for his lawyers…just a though.

  • Mickey07 says:

    When that guilty verdict lands things will certainly change for him,when he’s taking that long lonely walk down the steps his life is about to change bigtime,it’s a load of rubbish people saying things will stay the same!!there will be someone who will want to stab him in the back when he’s sat in his cell doing a bit of “knowle and dorridge” someone will want to take him on,how the feck can you run a football club and other business from a prison cell….he’s going to be under massive pressure to chuck the towel in…..good riddance to bad rubbish hopefully…

    • almajir says:

      How little you know Mickey

      • Mickey07 says:

        No mayor you keep dinning out on that one….long story I know but at the end of the day “he could have said no” to what ever he’s done couldn’t he?? But he didn’t did he?he saw the money fella and I bet his eyes lite up,stop feeling sorry for him mayor…..and to be honest as for your “how little you know comment” I don’t really want to know mate who’s properly stitched him up,they all seem shifty bollox out there and all cut from the same cloth regarding bihl….carson gets found guilty Friday then he’s hung himself,like i said he could have always said “no”..

        • almajir says:

          Mickey

          Talk about getting the wrong end of the stick. How little you know refers to your comment about it all changing on Friday – it won’t. I guarantee it mate, nothing will happen for a while. Instead of posting vitriol about Carson based on racism and anger, try reading what is written. PS – you never answered my question about taking your flag to St Andrew’s. Lost your bottle?

          • Mickey07 says:

            The old racism card always works wonders when your on the back foot?would you care to edit your comment maybe anger yes but no not racism…

          • almajir says:

            Back foot?

            Not all Mickey. I’ve seen how you’ve referred to “the Chinese” before.

            PS – you swerved the flag question again. Anyone would think you’re scared of answering that one…

          • mark says:

            Absolutely right Daniel also he seems to forget who he representing………..unless it himself??

    • chudlt says:

      Remeber he is only a share holder now.

  • Cyprus Blue says:

    If it goes to appeal, does he stay inside during that period?

  • Cyprus Blue says:

    I think someone mentioned before, saying that they expect a guilty, an appeal, and a not guilty based on a technicality.

  • mark says:

    Friday appears to be a big big day for all concerned………………………Daniel i know you are writing one book it may turn out to be a trilogy…………..

  • BhamCityJulian says:

    Wouldn’t he require ‘leave for appeal’ from the judge?

  • StaffsBlue says:

    All along, it’s looked like a nailed on guilty verdict… which means he’ll probably get off. It seems that nothing is as it seems over there.

  • mark says:

    Daniel has there been anymore coverage by the HK press now that we are close to a verdict??
    Do you see a mad frenzy by the HK press to be interested in this trial?/??
    What about our national papers here in the uk any of them bothered???

  • Aussiebrum says:

    Surely the only sensible action now is to short BIHL.

    You can then cover the short on Friday post judgement when the shares would be expected to be friendless in the market.

  • Agent McLeish says:

    I find it hard to believe that any sane person would want to do business in BIH. I can only assume that any ‘investors’ are just known associates of CY rather than serious investors. Statements released from BIH appear to be nothing but hot air and fantasy with no substance. Maybe CY as a contingency is now looking for some cash to fund what could be substantial bail payments if found guilty. Mind you, as a clairvoyant he will already know what the verdict will be.

    • StaffsBlue says:

      If he’s sent down those “39 steps” on Friday… Clair Voyant is the last name he’d want to use. ;))

  • Frankie says:

    Do think that we will see no change whatever the verdict…
    Having followed what evidence I could and smiled at Carson’s minimal defence, I think its likely that he will be convicted, unless something ‘odd’ has occurred that we do not know about…
    He’ll certainly appeal and ‘play the system’, that will take years and BCFC’s position will still be ‘in limbo’.
    Hope you are enjoying the cuisine out there Dan, quite spectacular as I remember.

  • Atahualpa is a BlueNose says:

    Someone somewhere is making some decent money if there is shorting going on in BIHL. Normally it would be between trusted associates and ‘friends’. There has been a fair amount of fluctuation in the share price to suggest this.

    For close to 3 long years we have been witnessing all of the events taking place in HK, and in less than 48 hours, we shall have a big decision made with an indication of which way things might move forward. If CY has done any planning, he’ll have a ‘best case’ and ‘worst case’ scenario worked out, and I do hope that this will involve BCFC being one of the things he has/had in mind when reaching any decisions. If he does get sent down for the maximum term, then does he really believe that every stakeholder’s interest lies in him still somehow trying to run the show?

    It’s probably unlikely, but if he’s found not guilty and set free, that’ll be a strange one, but with how BIHL have been planning for life without him, he has started to come to terms with the situation he is in I believe.

    One individual’s demise is an opportunity for another’s elevation. If there is going to be a power struggle of sorts, it’ll be interesting to see if PP continues to enjoy the same confidence of the hierarchy whilst CY was ostensibly in power.

    • tmsblues says:

      Though he didn’t have an option 2 in the case of relegation. You might still think he has two case outcomes in mind and to be prepared for either guilty or not verdicts. If guilty I said over a year ago he will appeal and with the late submission or non submission of some evidence late in the case he might just have grounds for hope! in the meantime he would need to prepare for some porridge whilst awaiting Bail and that will no doubt give him time to watch the stock price drop ! CY clearly has a number of relatives and friends holding or controlling large chunks of the stock and they will have instructions not to sell and to talk up the future of the Company. Carson is still selling a dream to stock holders and investors but our nightmare will continue. Quite perversely a Not Guilty verdict might actually be the best short term news for BCFC as the stock will rally and CY’s unfrozen funds and stock profits will be available to support the team he clearly wants to hang onto!

  • Andy says:

    Almajir – do you know what time Carson’s verdict is expected on Friday?

    • bluenoseb says:

      If the HK court system follows on what they were like during the trial it will probably be delayed for a national holiday of the licking lizard from 5thousand years ago, or a half day for the judges monthly golf tournament. Or any serious illness carson trying to think up now to get out of going. All possible after all this is the carson soap opera, no pun intended with soap carson!

  • Paul Carter - The Voice Of Reason says:

    I hope he gets off

    Gave me the best times of my life

    KRO Carson

    • Art Watson says:

      And then with his partner Peter”Trouble what Trouble” Pannu he systematically destroyed the team and the club.

      I hope he gets 5 years!

      Champagne at the ready if he does Paul.

  • dave mann says:

    Andy, dans already said the verdict will come any time after 1-30 am our time friday morning,
    but as bluenoseb says it might be dealyed due to him taking anual leave or the judge having
    a sex change operation or hong kong declareing war on mainland china…who knows!!!!! KRO.

  • AuldBlueEyes says:

    As I remember, Mr. Yeung has been charged with five counts of money laundering. Hence, he may well be found guilty of some or all of the five charges. (or conversely found innocent of all charges).

    Should guilty verdict(s) go against him, would he then (if so desired) have to file separate appeals for the separate verdicts?

    If the latter, I fear I may never live to witness the ending of this epic saga – and I’m only 38!!!
    (Not really – I’m 71)

    Thanks once again Mr. Almajir for your good work.

  • BillyBlue says:

    The share price movements were discussed early on and, as BIHL valuation became ludicrous. As sure as night follows day, the share price was bound to fall. It would seem certain that Yeung et al would have ‘known’ the share price was ridiculously high, hence ‘shorting’ and/or selling at the high price between HK$0.35 & HK$0.40 was a ‘no-brainer’.

    ‘Shorting’ a share means you ‘sell’ a share but guarantee to ‘buy’ it back at a later date. The idea is that the person ‘shorting’ thinks the price will go down and will buy the share back at a much lower price, hence making a profit. It is in the interest of the person shorting for the price to fall as low as possible and as quickly as possible because these ‘shorting’ positions are usually short term time limited. Whether Yeung has ‘shorted’, sold or whatever and with or without permission (if needed) of the Courts (has frozen his financial assets) is conjecture at this point, with only the bare HKSE Disclosure(s) being publicly available on which to comment.

    Disclosure thus far to the HKSE indicate that Yeung has shorted/sold shares on 4 consecutive days of 17, 18, 19 & 20 February, in which time his HKSE declared direct personal stake in BIHL has reduced from 19.82% to 17.07% There may, or may not, be further disclosures yet to come on Yeung’s BIHL dealings that could affect his BIHL %.

    However, the main question that arises is; How & Why did the BIHL share price increase so dramatically?

    On the day of return from suspension, BIHL shares opened at HK$0.09 which would seem a reasonable valuation. However, from that point onwards the price increased astronomically to hit a peak of HK$0.40 All this happening within a 14 day trading sessions. It would seem one of the key period’s during this timescale is from 3:30pm, 30 minutes before closing, (HK Time) Friday 14 February and during Monday 17 February. During this time phase (6 hours actual trading period) the share price rose from HK$0.24 to HK$0.40 and back down to HK$0.275 by close on 17 February. Interestingly Yeung initiated his first short/sell for 35.892m shares during this period. He is not alone however; Luo, also sold 81.9m shares at the very peak of BIHL share price, commencing sales @ HK$0.39 and selling all 81.9m at an average share price of HK$0.373

    Luo share dealing in BIHL (disclosed thus far to HKSE):
    1) Bought 438m shares @HK$0.102 at total cost of HK$44.676m giving him 8.51% in BIHL
    2) Sold 81.9m shares @ HK$0.373 returning him a total of HK$30.549m leaving him 6.92% in BIHL
    This means Luo has managed to acquire 6.92% of BIHL for only HK$14.127m (c.£1.1m). Good work if you can get it…..

    But Yeung & Luo are not the only ones either ……

    The only surprise thus far is that the HKSE hasn’t looked more closely at BIHL share price movement and share sales/shorting since its return from suspension, in particular the 6 hours trading between 3:30pm Friday 14 February and close of trading on Monday 17 February…….. Perhaps it is ……..

  • The only thing that jumps out is the shorting of the stock. We don’t know what price he shorted them at or if he has hedged it with a put option.

    It sounds a dangerous thing to do when he does not have overall control of the stock as they are held along with all his other assets by

    the court. He must be confident in that case that he will be able to buy them back at below the short price.

    The convertible bond I would say is a positive, he either had a ready buyer or he has confidence in the company.

    It’s all smoke and mirrors.

    What isn’t smokes and mirrors is that the HK Govt want desperately to convict him.

  • dave mann says:

    under carsons ownership we have had without dought a league cup win, a 12 game unbeaten run
    in the premiership a 9th place finish and european football, no argument there but was it all down to
    him and not the players or manager or was he just damn lucky for a period and that look as now
    came back to kick him and us right where it hurts….the last 3 years for us as been a never ending
    story and it must end now…but it wont.. unfortunetley.KRO.

  • Blueboy 88 says:

    Anybody think we will beat Ipswich at the weekend ?

    • StaffsBlue says:

      Out of their last 7 home games, I think they’ve only won 2 drawn 4 and lost 1.

      Out of our last 7 away games, we’ve won 4 drawn 1 and lost 2.

      I think it’s got a draw written all over it.

  • sappy sad says:

    i for one thought that bih was the owners blues fans had been
    waiting for..at the start that is ..what a shame that the dream
    turned into a nightmare…i wonder what del boy fate has up
    its sleeve waiting to become brums owners ..in the next act
    and why hasnt richard branson taken us up as his greatest
    challenge i am sure carson would have thrown in a free
    short back and sides …wish you were here sappy sad

  • Eric says:

    You have to be careful about calling people racist if they do not want a Chinese owner. I do not know the culture of a communist state but our experience is that the people that own Blues are very poor communicators with us Blues fans. I am sentimental enough to want a local person from Brum buying the club – hopefully a Blues fan. While this appears unlikely I want people to demonstrate that they have the fans interests at heart wherever they come from. Noone can argue that this is the case with Blues current owners.

    • bluenose08 says:

      simon cowells son posting on here already !!! nice to see your dads made you a bluenose any chance he could buy the club ?

  • The Francis Fake says:

    I think it is disgrace for CY to be shorting stock in his own company particularly just before the trial verdict. Shorting the stock bring the share price down which is working against the other shareholders interests. Even at this stage of his dire situation he is speculating further to try and make some money out of the situation. It also smacks of insider dealing. I have always tried feel some positivity towards him because he did bring us success and that he hasn’t tried to asset strip the club for his own interests, but, I find this sort of stock trading at this sensitive time is a joke.

  • ray says:

    If you think that CY cannot carry on his business behind bars just remember that Al Capone did. I think we can beat Ipswich too. KRO

  • bluenoseneil says:

    Guilty or innocent, the important outcome from the whole saga is that either Carson is allowed to plough liquidity back into BCFC or sell up and move on.

    Both outcomes from me are fine as long as it comes with an intention to drive the club forward again and support its growth….however communicative the Directorate choose to be/not to be with the fans.

    At the heart of it we all want to see a strong side win and for Blues to be a force to be reckoned with.

    Let’s hope the trial outcome (in whatever form) represents a step back towards normality, because quite frankly – and I have said it many times before – we spend a lot of time on here (me included!!) trying to be managers, tacticians, accountants, directors and christ knows what else when we should be in a condition to only have to worry about one thing: turning up, cheering on and enjoying footie.

    Step one of many starts Friday, and I will support the decision of the courts and the subsequent actions (as long as legal and above board) of whoever helms our club, and I urge others to do so too.

    KRO

  • andy says:

    I know Carson has resigned his position at Birmingham City and BIH but IF convicted is he allowed to still hold the majority shareholding, effectively pulling the strings from behind bars, or does he have to relinquish that shareholding?

    • almajir says:

      Andy

      He doesn’t hold a majority shareholding though – he owns less than 20%.

      If he owned more than 30%, the FL would definitely do something. As it is…


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