This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Asia Cork Shows Promise

Stocks in this article: AKRK ONP CAGC LTUS

Editor's note: The following article was written by Maj Soueidan, the founder of The Markets Edge Hedge Fund and GeoInvesting.

NEW YORK ( TheStreet) -- Asia Cork (AKRK) has been on the GeoTeam's radar since Aug. 20. We were encouraged that, in its 2009 first-quarter 10-Q, the company hinted that business was on the verge of rebounding from the negative effects of the global recession.

Asia Cork's second- and third-quarter results reflected and reaffirmed this sentiment. Add that the stock was selling below its book value, and the story began to gain some luster.

Well, after further due diligence, we eventually found the proverbial monkey in the wrench. In June 2008, the company consummated an offering of convertible promissory notes and common stock purchase warrants to an investor (identified as Ancora Greater China Fund, in a June 2008 8-K filing) for aggregate gross proceeds of $700,000. The one-year note obligation was past due as of June 2009. The company's obligations under the promissory notes were secured by an aggregate of 7,630,814 shares of common stock pledged by the company's CEO (Pengcheng Chen) and chairman (Fangshe Zhang).

We were unsure as to the dilutive implications of potential activities required to rectify this issue. As indicated in our earlier article, Opportunities in Cheap Chinese Stocks, these situations often present prospects for savvy investors who can identify imminent resolutions to liquidity roadblocks.

Stocks mentioned in the article, such as Orient Paper (ONP), Lotus Pharmaceuticals (LTUS) and China Agritech (CAGC), have handsomely rewarded investors who followed this train of thought. We also mentioned AKRK as a stock to watch.

On Dec. 31, 2009, we noticed some increased trading activity in Asia Cork shares. Unable to locate any news on the wires, we decided to sift through SEC documents and noticed recent S-4 filings outlining a series of transactions where the company's CEO and chairman disposed of 7.93 million shares. Given the CEO and chairman pledged 7,630,814 personal shares to cover the debt obligation owed to the investor, we are speculating that these shares were transferred to the investor to settle the debt obligation, maybe putting the liquidity issue to rest.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs