China Reverse Mergers Continue Wild Ride
April 11-12: Trading Halts Continue
On April 12, Universal Travel (UTA), an online travel booking service, became the latest Chinese small-cap company to have trading in its shares halted by a major U.S. exchange.
Of the 15 stocks halted on the New York Stock Exchange, the Amex or the Nasdaq as of April 11, 12 were Chinese companies.Universal Travel has long been criticized by short sellers, especially the Australian hedge fund manager John Hempton, who often writes on his blog about the stocks he's selling short. Last September, he wrote an item questioning the company's bona fides. Universal Travel announced on March 31 that it would need to delay the filing of its 10-K annual report with the Securities and Exchange Commission. Universal Travel followed Puda Coal (PUDA), whose stock was halted by the Amex on April 11. Another short seller, a Canadian investor living in Shanghai named Alfred Little, had taken to releasing highly critical reports on the Internet about stocks he has sold short. In a missive at the time, Little claimed he found evidence that Puda's founder sold half the company out from under U.S. investors.
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