J Capital is short FANH
Fanhua (FANH) is a U.S.-listed, China-based company that claims primarily to distribute insurance products. Before Q4 2017, most FANH income came from property and casualty insurance. In Q4, the company claimed to divest most of its P&C insurance business, as well as its insurance brokerage business. Currently, FANH is described in its disclosures as primarily a distributor of life insurance. Over the course of our months-long investigation, we concluded that Fanhua Inc. is nothing but a shell game among related parties that allows executives to loot investor cash.
Update February 5, 2019: The corruption scandal that we think has Chinese insurers treating Fanhua as a pariah. Plus, undisclosed loan guarantees.
SRNE NASDAQSorrento has been accused of stealing CAR-T IP. See the complaint here.
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Remark Holdings May be the Most Brazen Promote of the Year
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Terminal Patient
Management seems to have given away Cynviloq (a generic Abraxane candidate), the only promising drug the company ever looked like it might commercialize, for a pittance. Sorrento not only sold the drug to its chief competitor but then turned around and gave the cash payment back to that competitor and, seven months later, BOUGHT back 40% of the drug! We calculate that Sorrento actually paid the Nant network of biotech companies about $6 mln in the complicated set of transactions. We have identified a pattern of circular transactions and capital-intensive joint ventures that never show results. Many joint ventures have no clear purpose and have created no advancement in product development to date. JVs with the Nant network of biotech companies to which Sorrento contributed $60 mln are examples of such dubious spending. |
Disaster in waiting
IP Group has hurried to diversify risk from its biggest asset, Oxford Nanopore, a company that cannot make its technology work but whose valuation has been bloated by successive rounds of investment. Now, facing cash shortages, the company looks to be on the precipice of a major devaluation if not failure. That single company could drag down IPO’s price by 20%. |
No “there” there
Wherever we look, we cannot find a real business behind Remark Holdings. The company changes its business description so quickly that even management struggles to explain. That does not stop them from pushing out press releases that make wild claims for fantastic new technologies to come.
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Where's the Money?
We think the recent $16 take-private bid was an attempt to prop up share value. Our interviews in China and the company’s own Nasdaq prospectus suggest that Guangzhou Cornerstone, the company that says it will raise the money for the bid, has little capability to come up with the funding required. What's more, we think this call center operator is improperly inflating profits by diverting costs into undisclosed related parties. This could drive up optical results while leaving the
shareholders’ cupboard bare. |
Disclaimer
The reports and other commentary displayed are for information purposes only and should not be relied upon as investment advice. The information provided is not a complete analysis of every material fact regarding any country, region, or market. Because market and economic conditions are subject to change, comments, opinions and analyses are rendered as of the date of this posting and may change without notice.
Opinions are intended to provide insight on macroeconomic issues and commentary is not intended as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy.
Investments involve risk. The value of investments can go down as well as up, and investors may not get back the full amount invested. The information contained in these reports has not been reviewed in the light of your personal financial circumstances. Reliance upon the information is at your sole discretion.
The reports and other commentary displayed are for information purposes only and should not be relied upon as investment advice. The information provided is not a complete analysis of every material fact regarding any country, region, or market. Because market and economic conditions are subject to change, comments, opinions and analyses are rendered as of the date of this posting and may change without notice.
Opinions are intended to provide insight on macroeconomic issues and commentary is not intended as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy.
Investments involve risk. The value of investments can go down as well as up, and investors may not get back the full amount invested. The information contained in these reports has not been reviewed in the light of your personal financial circumstances. Reliance upon the information is at your sole discretion.