Sunday, December 23, 2012

VLOV Inc. (VLOV) Chinese Clothing Pumped By "Fitzroy McLean"

Some weeks or months ago I got a mailed teaser from someone calling himself Fitzroy McLean from an outfit named Without Borders.  This dude claims to be a former U.S. Army Ranger and CIA operative, which of course makes me wonder what any of those things have to do with stock picking.  The guy's LinkedIn profile makes me wonder when he would have had time to serve in the CIA's Clandestine Service as he claims in his mailer.  If he graduated from West Point in 1988, his five-year active duty service obligation would have expired in 1993, which means he would have had less than a year with the CIA before becoming an investment banker in 1994.  "Fitzroy McLean" is welcome to contact me any time he likes to discuss his bona fides.  I'm hazarding a guess that he's a fake, taking his name from the real Sir Fitzroy MacLean, a real-life covert operative.

Anyway, this article isn't about him or his assumed identity.  It's about the stock he's pumping, specifically VLOV Inc. (VLOV), a Chinese clothier.  I am not an expert on the Chinese clothing market.  Big deal.  China's headed into a recession just like the rest of the developed world and your average Chinese upper middle class consumer will be hard-pressed to buy upscale clothing.

This stock did a reverse split last September to maintain its exchange listing in the U.S.  Reverse splits are generally a bad sign.  BTW, this is the second reverse split the company has done in a year.  I would ordinarily consider a company with an EPS higher than its market price to be an unbelievable bargain, but I emphasize the "unbelievable" here.  The share price has absolutely cratered in the past few months despite the extremely healthy earnings VLOV has reported.  I cannot understand that action.

I swore off investing in China months ago.  I don't need to revisit that decision, and I certainly won't do so at the behest of a penny stock mailer.  I wonder if Dr. Fu Manchu wears VLOV stuff.

Full disclosure:  No position in VLOV at this time.