Green Giant (NASDAQ: GGE) stock is down 89% on yesterday. That’s, obviously, a pretty big fall. What makes it more of a problem is that there’s no specific news to explain this. No corporate releases to the stock market for example. Nothing in the usual sources, nothing even at Goggle News.
We can see from the varied stock market sites that the price change has indeed happened. It’s also on a vast volume for the stock. 84 million shares traded, as opposed to a normal daily volume of 100k or so. But actual detailed information about why Green Giant has turned into a dog overnight not so much.Which is a problem for us all. We have to make assumptions.
The business line: “Green Giant Inc. operates as a real estate development company, primarily in the construction and sale of residential apartments, car parks, and commercial properties. The company is involved in the development of commercial and residential projects, including multi-layer apartment buildings, sub-high-rise apartment buildings, high-rise apartment buildings, and office buildings, as well as other road construction projects. The company was formerly known as China HGS Real Estate Inc. and changed its name to Green Giant Inc. in March 2022.”
Well, OK, we know that the China real estate market is - shall we say? - interesting at present.
Green Giant stock price from Google Finance
There is a particularly vicious short selling report out there but that’s from back in September so shouldn’t be the influence today.
So, why? Why an 89% fall in the one day in Green Giant stock? Sure, given the China Mainland real estate market sector we can imagine something horrible has happened there. All too many of the large companies - Sunac, Country Garden and of course Evergrande - have gone bust in varying forms. And it’s unlikely that a definitely third tier developer like GGE would make the government’s list of 50 to save.
But the much bigger point is that we simply don’t know. This highlights the danger of investing in these Mainland stocks even if they are US quoted. Sure, those short sellers might be right and it’s all more than a little odd anyway. But even if the company’s completely straight we’ve still got a problem. We’ve a 90% price drop here and we don’t know what. We don’t know why after the fact even - so, how can we gather the information to be able to predict price movements?
As we’ve said a number of times we simply do not get the information flow to be able to invest in these China stocks. We can gamble, blind, but that’s not the way to preserve, let alone make, capital.