Chinese Company’s CEO, COO and Cash All Missing

Ultrasonic AG, a Chinese company listed in Germany has reported that its CEO, COO and cash have all gone missing. According to a statement released by the company, CEO Qingyong Wu and COO Minghong Wu are “not traceable” and “that most of the company’s cash funds at PRC and Hong Kong levels have been transferred being no longer in the company’s range of influence.”

Not surprisingly, the German stock market reacted to the news and Ultrasonic shares plunged 71.6% in heavy volume closing at 1.798 euros on Tuesday.

ultrasonic-chart

Chart: Börse Frankfurt

Ultrasonic had been enjoying steadily rising revenues and profits. Revenues had grown from 49.9 million euros in 2008 to 163.8 million euros in 2013. Profits similarly grew from 8.4 million euros to 35 million euros over the last five years. The company ended 2013 with a cash balance of 108.5 million euros.

This case highlights how important it is to analyze not just a company’s business and financial performance — but the management team leading the company as well!

In fact, a company should fulfil all four investment quadrants – Business, Management, Financials, Valuation – before you even consider investing in its stock. Unfortunately in the case for Ultrasonic investors, it looks as if it’s near impossible to ever get their money back.

Adam Wong is the editor-in-chief of The Fifth Person and author of the national bestseller Lucky Bastard! which made the Sunday Times Top 10 Bestseller’s List in 2009 and Value Investing Made Easy which made the Kinokuniya Business Bestseller’s List in 2013. In 2010, he appeared on U.S. national television on the morning show The Balancing Act. An avid investor himself, Adam shares his personal thoughts and opinions as he journals his investing journey online.

2 Comments

  1. Gursharan Singh

    September 17, 2014 at 4:48 pm

    What safety is there if the Protector is the Plunderer?

    Most politicians and corporate leaders in power have been suspected of plundering the wealth of the countries and companies respectively world wide but without any punishment because of possible collusion of the Enforcers-Investigators-Judiciaries as this is called WHITE COLLAR CRIME and the culprits are also White Collared and holding positions of power. Even Religious & Charity funds are not safe from these White Collar Criminals. Sadly even the Almighty appears to be silent as the name and teachings of the respective ‘gods’ are used to commit the crime.This could be due to the fact that most of the reps of the ‘gods’ are also dressed in white.

    • The Fifth Person

      September 17, 2014 at 5:18 pm

      Well, in this case it looks like a couple of Chinese blokes made off with millions in euros leaving investors and stakeholders in the lurch.

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