UniStrong's webpage. (Internet photo)
Amid allegations of insider trading, UniStrong witnessed its share price close at 20.16 yuan (US$3.23) on Feb. 6, a far cry from its peak of 113.98 yuan (US$18.27). As a result, the market value of the 1.053 million shares of the company owned by former NBA star Yao Ming have shrunk over 70% from their highest level.
According to Chinese-language web portal Eastday, the Beijing-based manufacturer of GPS products has been suffering shrinking profits in recent years and even incurred losses in three quarters of last year.
On April 2, 2010 when UniStrong listed on the Shenzhen Stock Exchange, its share price skyrocketed to 91.5 yuan (US$14.66) from its offer price of 37 yuan (US$5.93) and climbed further to 113 yuan (US$18.11) a few days later.
Eastday reports that Yao Ming began to endorse UniStrong from 2005 and was paid in stock for doing so. In December 2007, UniStrong transferred 375,000 yuan (US$60,120) in shares to Yao Ming and transformed itself into a limited company six days later. Yao's stake was converted into 675,000 shares in the company.
Following two capital increments last year, Yao's stake was boosted to 1.053 million shares, worth 21.27 million yuan (US$3.41 million) in market value, based on the closing price of 20.16 yuan (US$3.23) on Feb. 6. After factoring in dividend payouts over the past two years, Yao's shareholding has shrunk by over 70% in market value from the peak level of 113 yuan (US$18.11).
According to wep portal Sina, on Feb. 4 UniStrong announced its acquisition of Canadian firm Hemisphere, the world's third-largest manufacturer of high-precision GNSS (global navigation satellite system) chips, causing UniStrong's share price to shoot up 5.92%, closing at 22.38 yuan (US$3.58) before plunging 7.51% plunging to 20.70 yuan (US$3.31) the following day.
On Feb. 4, the five securities companies who purchased the most bought 18.7 million yuan (US$2.99 million) in UniStrong shares, while the five leading sellers sold 42.37 million yuan (US$6.79 million) of UniStrong shares. The adroit arbitrage led to suspicions of insider trading.
Yao Ming 姚明