SkyPeople Soars 40% After GeoInvesting Report
Skypeople Fruit Juice Inc (NASDAQ: SPU) dropped 12 percent Tuesday, but recovered and then some by Wednesday morning.
GeoInvesting noted in a research report in late July that nano-cap Chinese stocks as a whole have "began losing its swagger in 2010 due to numerous proven cases of fraud that seemed would never end."
The firm came across Skypeople following the company's announcement that it reached an agreement with a government back entity, Shaanxi New Silk Road Kiwifruit Group, to sell 51 percent of one its leading subsidiaries.
GeoInvesting said it was "skeptical" about certain aspects of the proposed transaction. As such, an on-the-ground due diligence team was dispatched to uncover the facts, including talking with entities involved in the proposed transaction.
"The truth is that we did actually have some positive findings in our due diligence," GeoInvesting said Wednesday morning, correcting various reports on Tuesday that said the contrary.
The deal does value Skypeople's subsidiary at $100 million, or $25 per Skypeople share. GeoInvesting noted the transaction could wind up as being a bullish catalyst for the stock and the U.S. listed China space as a whole.
The $40 million market cap company traded recently at $11.52, up 38 percent.
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