Harbin Electric Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Harbin Electric (Nasdaq: HRBN  ) surged more than 11% in early trading after the company set a date for a shareholder vote on a proposed acquisition.

So what: The proposal, to take Harbin private for $24 a share, comes from a group led by Chairman Tianfu Yang and has been the subject of much bearish scrutiny. For months the stock lingered below $20 a share as investors held their collective breath, skeptical that a deal could get done.

Now what: Today most of those fears appear to have been alleviated. Shareholders of record as of Sept. 13 will vote on Yang's proposal on Oct. 29. Will they approve the transaction? Would you buy shares and play for the $24 takeout price? Please weigh in using the comments box below.

Interested in more info on Harbin Electric? Add it to your watchlist by clicking here.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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Read/Post Comments (3) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 30, 2011, at 9:13 PM, reh4c wrote:

    I went in with a cost basis around $15, but didn't risk too many shares in case the deal went south.

  • Report this Comment On October 05, 2011, at 12:23 PM, MKArch wrote:

    The short case is that the bank will back out of lending the money to purchase the company at the last minute. I'd hardly say the this proves anything. I don't remember the exact details but the same bank that's supposedly loaning money with no collateral this time is already holding the bag on an earlier loan that they can covert to equity and the current buy out scam they are helping to foster is probably allowing them to cash out their stock from the first loan. Not far fetched if you read some of the recent Chinese RTO auditor resignation letters. Not a whole lot of respect for U.S. investors and rule of law in the U.S. over in China.

  • Report this Comment On October 05, 2011, at 12:24 PM, MKArch wrote:

    BTW if you read the resignation letters you will see this wouldn't be the first time Chinese Banks aided in the scam.

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