NEW YORK (
(ONP - Get Report) shares were spiking nearly 20% Wednesday after the tiny Chinese paper producer issued fourth-quarter results that encouraged bullish investors to bid up the name.
Fourth-quarter numbers as reported by the company showed profit growth of nearly 70% year-over-year and revenue expansion of 15.7%. That translates to $5.3 million, or 29 cents a share, on the bottom line for the period ended December 31, and $36.3 million on the top.
Orient Paper shares were trading late morning Wednesday at $5.64, up about 18% on heavy volume, bucking another downdraft in the broader equities markets, with the
Dow Jones Industrial Average giving up more than 100 points.
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Orient Paper was a battleground stock for much of last year, after a controversial short-side research shop, Muddy Waters, accused the company of out-and-out fraud and theft. But Orient Paper appeared to have won the contest over its doubters when, last fall, the audit committee of its board determined, with the help of $200,000 worth of consulting from Deloitte Financial Advisory Services, that its accounting was clean. (Orient Paper's auditor is the Hong Kong affiliate of BDO Ltd., not Deloitte.)
Still, Orient Paper's stock never recovered from the charges. The stock traded as high as $11.75 in April last year. Including Wednesday's gains, the stock is down 11% since the start of 2011.
Orient Paper's equity is now mostly in the hands of retail investors. Institutions hold only about 15% of the company's float, according to Computershare, a stock transfer agent and data provider.
war of words between longs and shorts
, which played out on Internet chat rooms and blogs, went to the heart of a broader controversy surrounding small Chinese companies that have come public in the U.S. through a procedure known as a reverse merger, sometimes called a reverse takeover, or RTO. (Orient Paper first listed stock on this side of the Pacific in a 2007 RTO. It was uplisted to the American Stock Exchange in 2009.)