Recently, the chairman of the Chinese listed company Stone Technology advised investors to “be patient” in response to a significant drop in the company’s stock price. However, some investors revealed that he had sold the company’s stock multiple times, cashing out nearly 900 million yuan. This news quickly became a hot topic on Baidu on December 5th.
According to the Henan Business Daily on December 3rd, Chairman Chang Jing of Stone Technology recently posted several videos on a short video social platform showcasing his participation in “desert off-road” activities. However, investors of Stone Technology expressed dissatisfaction, believing that he was not focusing on business matters. Some investors expressed concerns over the sharp decline in Stone Technology’s stock price in the current bullish market, which still remains below the position since September 24th, affecting the company’s image. They hoped that Chairman Chang could pay more attention to enhancing the company’s market value management expectations and boosting investor confidence.
In response to investors’ dissatisfaction, Chang Jing released a video on November 29th, stating that overwhelming comments caused him great distress. He urged investors holding Stone Technology stock to be patient, emphasizing the importance of long-term company development over short-term stability for stock prices. He highlighted the time frame from current fundamentals to final outcomes, urging investors to wait patiently.
However, from March last year to June this year, Chang Jing reduced his stake in Stone Technology through concentrated bidding and inquiry transfers, decreasing his ownership from 23.15% to 21.09% and cashing out approximately 888 million yuan. Some investors suspect that his actions of reducing holdings at a high point raise concerns.
In response to this, some netizens questioned, “What is the purpose of cashing out after the lock-up period expires?” and “I heard the chairman reduced his holdings, which made me even less confident. If he doesn’t believe in the company, what hope do small shareholders like us have?”
On December 4th, Red Star Capital Bureau reported that legal representatives of Stone Technology responded to these claims, stating that the Chairman did not engage in high-end reductions and that there was a misunderstanding in the advice to investors to “be patient.”
The legal representative mentioned that the Chairman chose to transfer shares through inquiry at prices lower than the market value at that time. The representative clarified that the Chairman’s advice to “be patient” was misinterpreted. He believed that investment or business decisions should be considered in the long term and that individual investor interpretations varied due to recent stock price fluctuations.
Over the past two months, Stone Technology’s stock price has plummeted from its high of 333.50 yuan per share on October 18th. As of the A-share closing on December 4th at 15:30, Stone Technology was at 217.80 yuan per share, a 2.13% drop from the previous trading day, with a total market value of 40.233 billion. The stock price has fallen by approximately 30% from its peak.
The latest financial report data for the third quarter of 2024 show that Stone Technology’s revenue was 2.591 billion yuan, an 11.91% year-on-year increase, but the net profit attributable to the parent company was 351 million yuan, a 43.40% year-on-year decrease.
Some investors suggested, “I think the chairman should communicate more with investors so that we don’t feel abandoned. After all, we are all investing in the company’s future.”
A netizen commented on the reality of Chinese listed company controllers cashing out, saying, “Most Chinese billionaires are paper wealth, otherwise so many people wouldn’t rush to cash out after going public, either directly reducing their holdings or pledging their equity to other financial institutions for conversion because only real cash in hand is truly disposable wealth. The money that was hard to earn in real business operations for twenty years is suddenly realized with just a single-digit percentage of shares after going public.”
Public records show that Stone Technology is a brand under Beijing Stone Century Technology Co., Ltd., established in July 2014 and listed on the Shanghai Stock Exchange’s Science and Technology Innovation Board in February 2020. The company’s main product is intelligent sweeping robots.