Does anyone have a sound explanation of why the stock that sucks went
up 10% in the last hour of trading??

I have an idea... most likely though, I am not going to find people
who will agree with me. I think Goldman and other underwriters are
selling Chinese companies for WAYYYYY too much. BUT because this are
Chinese companies they seem to have great future and everyone is
paying for them a lot anyway. So as long as there is demand, they will
be doing that...

Now, I think that todays stock jump was not something natural. In my
opinion it was created by the underwriter (watch out for that). They
simply don't want to be associated with overpricing their issues.
Furthermore, during the first month they never want the price of the
stock to go down because that would indicate they overpriced it.
Therefore, I think they took a little cost there, bought several
thousand shares of LFT and created artfifcial demand. Now - meaning
tomorrow - people will jump on it, to get on the train (I think it
would be smart... as long as you get out the same day) and the stock
price will be driven up even higher.

There was no news on the stock, nothing. And it went up 10% out of
nowhere. The funniest thing is they did it at the end of the day. Had
they done it at the beginning they would have to support the price the
whole day. Now they have bunch of people excited about a stock that
went up 10% and even went up after hours another 1% or so.

What do you guys think about that? I am just trying to give some info
to those who may have never heard of such practices by underwriters.

GOOD LUCK TO YOU ALL!

I dunno. It would be an expensive practice for the underwriters and
its not like these chines stocks need the help at the moment.
All chinese stocks went up at the same time yesterday. Look at STV and
TSL for examples. It might be the rate cut as that should put pressure
on the dollar to fall which is better for non us companies, but i dont
know. Something caused it though. I just hope it signals the start of
a breakout..

I believe the stock price increase was in advance of some upcoming
news, This morning after yesterdays gains STV posted their earnings
date. As far as your argument of Overpriced Chinese stocks it's hard
to defend any company that has such high valuations especially if you
are a Warren Buffet value investor. Thirty years ago when i started in
the market, any company that traded with a P/E over 20 was listed on
the pink sheets, but since then the street has shown a willingness to
pay more for Potential Growth then current earnings. A perfectly good
example is VMW   I was hard pressed trying to convince a freind of
mine to buy the 100 Jan call in august, at the time 10 contracts cost
7,300.00 + commission and are now worth over $60,000  China has one of
the fastest growing economy's in the world and with the amount of
potential growth, the street is will to pay now for future earnings.
My only concern is that after the Olympics the government might impose
a higher tax rate or implement more restrictions on company's that
could impact their bottom line,   Good Luck

Mike

dead cat bounce

The thing is that it is not really that expensive for them. It is not
like they buy the stock and have nothing they still own the stock. In
the short run they incur a loss (let's say they bought 1 million
shares to drive up the price, for $27 - that is $27 million - they are
not in rush, so they can wait for the price to go up, and even if it
doesn't they can still sell it woth some loss). This way investors get
impression that the issue was not overvalued and buy next IPO from
that company. In the past GS, would have an average premium of abotu
6-7% between the price the company was getting and the intial market
price (even 20 years ago MSFT was priced only 6.7% higher). Now, LFT
got $14-16 and the issue went on the market for $25!!!! Goldman knows
what it is doing. They have smart people there. $3million loss (even
10% on rebuying shares) is nothing compared to the confidence from
investors who say - "If GS in an underwriter I am defnitely buying
it".... Think about it.

As you already know there was no news on this stock. It started out
lower than I expected but that's because investors are generally
uncertain even about DOW stocks, so why the heck would they be
confident about Chinese IPOs??

Good luck with it. Hope you sold it already with some gain...

Hmm, it spiked again at the end of trading today to 27 near the bell...

It is probably because someone got really excited about the stock that
went down 10%!!! - I don't think so... This is a dangerous play... But
I believe no one will let this stock fall below 25, at least for the
first month, so there is some cushion for you.