Market Overview

SkyPeople Fruit Juice Falls Following Geo Investing's On The Ground Due Diligence

SkyPeople Fruit Juice Falls Following Geo Investing's On The Ground Due Diligence

Skypeople Fruit Juice Inc (NASDAQ: SPU), a China-based holding company that sells fruit juice concentrates, fell more than 4 percent Tuesday morning following a report by Geo Investing.

Geo Investing first highlighted the relatively unknown nano-cap company in late July after the company entered into an agreement with a Chinese State Owned Enterprise (SOE).

As part of the agreement, a subsidiary of SkyPeople, Shaanxi Guowediuomei Beverage, agreed to sell a 51 percent stake of itself to the SOE, Shaanxi New Silk Road Kiwifruit Group (NSR). The deal would have valued the subsidiary at $100 million, or $25.00 per SkyPeople share.

Related Link: Geo Investing Releases Report On Sky People

Geo Investing highlighted the fact that the deal is contingent only "if certain conditions are met."

"When I first read the SPU 8K detailing the share transfer transaction I had a hard time convincing myself that the SOE is going to fork over $46 million," Geo Investing argued. "The game is simple: entice investors with a deal that appears to add legitimacy to a dying ChinaHybrid, but make the deal predicated on conditions that will never be met."

Shares of SkyPeople hit a 52-week high of $20.95 in the days following the transaction announcement. The stock later suffered a steep pull back to the $6.

However, the stock surged 58 percent on Monday, prompting Geo Investing to re-address the issue and speculate that "pumping" is at work again in the stock.

At time of writing, SkyPeople was trading at $8.52, down 10.32 percent on the day.

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