TD Holdings (NASDAQ: GLG) stock should jump 5,000% this morning. GLG stock will also change name to BAIYU Holdings (NASDAQ: BYU) possibly to make sure no one recalls the stock price performance as GLG. Or maybe the new name does reflect the change in management priorities and whatever else it is that they try to tell us. Whatever the reason for the name change that’s the only unusual thing here. The price rise is a nominal one and also the result of a purely technical move. There’s one specific problem to be solved here and this is the way to solve it too.
As to what is done at what is now to be BAIYU: “TD Holdings, Inc. engages in commodities trading and supply chain service businesses in the People’s Republic of China. The company’s commodity trading business engages in purchasing non-ferrous metal products, such as aluminum ingots, copper, silver, and gold from upstream metal and mineral suppliers and then selling to downstream customers. Its supply chain service business covers a range of commodities, including non-ferrous metals, ferrous metals, coal, metallurgical raw materials, soybean oils, oils, rubber, wood, and various other types of commodities.”
OK, that’s not normally a high margin business. If it is that means you’re taking positions, as a commodity trader, which is horrible when they go wrong. But if it’s straight throughput then margins are narrow.
BAIYU Holdings stock price from Google Finance
That price spike there is when they signed to develop a battery project - as we can see the effect was short lived. It also nearly, but not quite, solved their technical problem. Which is that you cannot remain on Nasdaq as a penny stock. It’s just that the main New York markets think there’s a price range for respectable stock prices and pennies isn’t it. If that price had remained above the $1 minimum bid price for 10 days then the problem would have been solved for another 18 months - but it didn’t and thus wasn’t.
There is a solution - simply declare that 50 old shares are now one new one, a one for 50 reverse stock split: “TD Holdings, Inc. (GLG) will effect a one-for-fifty (1-50) reverse stock split of its Common Stock and a change to corporate name and ticker symbol to BAIYU Holdings, Inc. (BYU).” This doesn;t not directly, change the market capitalisation of the company. Just the number of shares that make that up - therefore the stock price reacts mechanically, rising 5,000% or 50x.
This still leaves the base problems of how to run the business better, make a profit etc, but it does save the Nasdaq listing.
