Huadi International Group - HUDI

Down in the Hole

Shares of HUDI have been on one of those wild rides I always hope to avoid but nevertheless end up attracting every so often. 

After announcing Thursday that the company held “several virtual conferences on clean energy development” with a local government, the shares then staged a stunning 700% gain heading into the weekend.  Those gains quickly evaporated when the company stunned their retail supporters early Monday morning by placing 1M shares with a couple of institutions for close to a 90% discount selling the shares at $25 after closing on Friday at $180.  Ridiculous.  Does anybody really believe that either of those institutions has any actual skin in the game? 

Chinese underwriter Univest Securities placed the shares, naturally.  For fun, head over to the Univest Securities website and pull up a list of their recent transactions; SLNH, JZ, WETG, CENN, MRZM, CTOG, TOP, PLIN, TKLF, EBON.  Disasters every single one.  The SEC is protecting US retail investors that piled into the latest meme stupidity by allowing this… how exactly?

One thing each of those Univest underwritings positively proves, however, is that a bigger float and the resulting liquidity are enemies of the game these Chinese companies play.  We shall see if shares of HUDI follow a similar path.