AOB

[Tirebldr]

I'm holding, and going to buy some more when it settles down.

[shawFund]

TA analysis of AOB:

50% retracement at $3.50
61.8% retracement at $3.00

After big run, it has a big profit taking. Because this is not a story stock and has good fundamental.  I don't think that its price pattern will follow the pattern of two years ago.

It reached $4.75 in Jan 2004 and fell to $1.25 in August.

This time, it reached a high of $5.92 and $3.00 will be the bottom I expect.

From the analysis, I will re-enter my position at $3.50 if candlestick pattern shows a strong bullish reversal signal.

[shawFund]

Here is the chart:

You can see it has two bounced backs at 23% and 38% retracement levels then continue its downtrend.

I expect it will have another bounce at $3.50.

[valueseeker]

I had to sell AOB today to protect a large profit. I think the story is someone decided to short above $5. Since it's quarter ending, they want to maximize the profit. The problem is typically little news for AOB before next earning release (mid November), I think the shorts maybe able to keep it down a bit longer & lower. I may consider buy it back if it dips below $3.5.

[bigdogs99999]

Certainly selling to take a profit is always a good thing!     But there has never been an appreciable short interest in AOB, and the last two reports (Aug and Sept 12) had short interest at 400K+ and 316K.  Given that more than a million shares a day have been trading hands of late, the short interest is less than a day's trading volume which is absolutely nothing and not indicative of shorts who can keep the stock price down.

[la-onda]

time for re-entry now

[la-onda]

update:
American Oriental Bioengineering Calls Class A Warrants
Thursday September 29, 1:27 pm ET

HONG KONG--(BUSINESS WIRE)--Sept. 29, 2005--America Oriental Bioengineering, Inc. (AMEX: AOB - News), an emerging Chinese company that produces and distributes a broad range of pharmaceutical and nutraceutical products, announced today that it delivered a redemption notice with respect to all of its Class A warrants on September 6 and, as of September 26, all 7.5 million warrants have been exercised. Also, the Company delivered a redemption notice with respect to all of its Class B warrants on September 22, which would take effect on October 12, 2005. The warrants were issued in connection with the private placement that the Company completed on November 23, 2004. There are no other warrants currently outstanding other than Class A and Class B warrants described above.

[la-onda]

bouncing back !!!!!!!!!!!!!!!
On fire !!

[la-onda]

 
from 3.47 $ to 4.24 $ intrady, order filled @ 4.11$ !!!

[shawFund]

AOB bounced back at exactly at its 50% retracement today.

Gained 20% from there.

[shawFund]

David or Micheal:

Could you please give some explaination what the news mean?

Redemption means that the company wants to buy the warrants back. Am I right?

Exercised means that all the warrants holders already exercised their right to buy the stocks.

That means, the company gets the money and the shares diluted.

Help needed to have some analysis on this news, which pushed the stock up today:


HONG KONG--(BUSINESS WIRE)--Sept. 29, 2005--America Oriental Bioengineering, Inc. (AMEX: AOB - News), an emerging Chinese company that produces and distributes a broad range of pharmaceutical and nutraceutical products, announced today that it delivered a redemption notice with respect to all of its Class A warrants on September 6 and, as of September 26, all 7.5 million warrants have been exercised. Also, the Company delivered a redemption notice with respect to all of its Class B warrants on September 22, which would take effect on October 12, 2005. The warrants were issued in connection with the private placement that the Company completed on November 23, 2004. There are no other warrants currently outstanding other than Class A and Class B warrants described above.

[valueseeker]

Sold yesterday and my order of $3.53 was filled to buy back all my shares while I was in the meetings. Quite amazing!

This is what I have from the analyst report (which has AOB one year price target at $7.84 based on forward earning of 18). It looks like large amount of warrants sold in the last several days (they bought in $0.85-1.6) and it explains why the stock dropped recently. Now it seems that the conversion is over and the market took it very well. For those of us bought VPHM in the $6's, the stock travelled between $5-$6 for a couple of weeks (during warrants conversion) before it really took off. Hopefully, we will see the same thing with AOB here.

--------------------------
AOB has a substantial overhang of unexercised warrants—We estimate AOB has approximately 10.1 million warrants outstanding with exercise prices ranging from $0.85 to $1.60. In total, the exercise of these warrants would increase AOB's total shares outstanding by 25 percent, creating substantial dilution for existing shareholders. On the plus side, we estimate the exercise of these warrants would also bring $8—$9 million into the company's coffers.

[valueseeker]

Here's some analysis on raging bull. I think there is no doubt that AOB will follow VPHM's path after it's conversion ended at high $6's. We should see new highs before earning release.

------------------------------

the company initiated the warrant call. The terms were something like "if the stock trades at or above $____ for some consecutive number of days, AOB has the right to call (force conversion of) the warrants within ___ days".

AOB saw a chance to pull in this capital and made the call.

Prior to the warrant call, which forces conversion, the warrant holders could have CHOSEN to exercise the warrants at any time. Generally they don't until the warrants are about to expire (assuming they are in the money), as waiting defers both the cash flow out and starting the tax clock.

3MM shares will be issued as the warrrants are converted. With about 40MM shares out, this is not a huge impact. What often happens is that the stock price drops towards or to the exercise price as warrant holders sell short, exercise the warrant, and deliver the stock acquired via arrant exercise to cover the short. Whether that will happen now, or in fact already happened (the drop last week would be explained if the company contacted warrant holders about the call before making a PR, which probably is the case) is not fully known. In any case, 3MM new vs. 40MM outstnading is not a huge impact. Anyone worth listening to on this co. was already basing their calculations, and decisions, on the fully diluted number--deep in the money warrants such as these are as good as issued.

When I called the co. today, they declined to answer whether they had immediate need for the funds for an acquisition. Very proper--SECc rules, yada yada. I would be disappointed if I heard anything else--that would raise an alarm. Personally, my take is that they DO have something in the works, and soon. They may not need the $5MM to be raised from the warrants (3MM @ $1.60 or so each) to seal the deal (they already have $15MM in cash before the warrant call), but I am guessing they have a significant acquisition coming-to the tune of $10-$12MM, and pulling in this $5MM NOW gives them a working capital cushion.

[bigdogs99999]

Thank you valueseeker!!!  Well deserved applause.  You are saving me some research time here and what you say makes sense.  When a company is in a position to force exercise of the warrants asap, I usually like that for it gets the $ in the door, limits the ability to monkey with the market as the warrants mature, and usually indicates that the company sees the warrants being worth more in the future (because of a higher anticipated stock price).  Whether the money is going into the AOB bank account or being used seemed less relevant to me, but probably an interesting question.  I was thinking about exiting AOB but think I will stick in a bit longer now to see if the stock reacts like VPHM....  Thanks!

[shawFund]

Sold Friday at $4.75.

It bounced back to the previous 23.8% retracement level,
which is my short term bounce back target and it reached that target in one day.

Next few days will see the stock traded very volital and becomes a good day-trade target.