Some major issues of listed companies will involve phased disclosure of progress, and investors need to continue to carefully read relevant announcements. When issues last for a long time, some investors habitually underestimate the severity of the impact of the issue and are making investment decisions. The company sometimes ignores the risk warnings that the company has disclosed in the progress announcement, resulting in significant losses.
In September 2012, Xiaoming paid attention to the announcement of W company’s case being investigated. The content of the announcement showed that “because the company is suspected of violating securities laws and regulations, in accordance with the relevant provisions of the Securities Law of the People’s Republic of China, X Securities Regulatory Bureau decided to file an investigation on the company. "On the day the announcement was disclosed, trading in the stocks of listed companies began to be suspended. Almost a month after trading suspension, the company disclosed the 2012 interim report correction announcement and resumed trading. Due to the inflated profit, the company did not disclose the company's suspension of production in the first half of the year. The company is conducting further self-examination, and investors are advised to pay attention to investment risks. The company's stock immediately fell to the limit on the day of resumption. A month later, Xiao Ming paid attention to the exchange's public condemnation of the company's 2012 mid-year report for inflated revenue, costs and profits.
Xiao Ming believes that the company's bad news has been released, and the company's stock price has fallen sharply in the previous period. It is the best time to buy the company's stock. At the same time, there are some posts in the stock bar that agree with him, so Xiao Ming Shigekura bought the company's stock. Little did they know that the follow-up company disclosed the self-examination result announcement again, showing that the company had inflated revenue and profits from 2008 to 2011, and the company's stock price continued to fall. Xiao Ming really realized the importance of the risk warnings disclosed by the company in the previous period. This is the end of the matter. Xiao Ming decided to cut his position with tears and lost a lot of principal.
Xiao Ming did not seriously assess the seriousness of the company’s investigation into the case, and relied on his superficial self-feeling and some "grass" and "informed sources" in the stock bar as the basis for decision-making in investing in stocks. The investment loss to W company was regarded as Xiao Ming. I paid myself an expensive tuition fee.
[Warm Reminder] When buying stocks, investors should carefully review the company’s announcements. They should pay close attention to the company’s major risk announcements on related matters. They can also use the Shenzhen Stock Exchange Interactive Exchange Platform (for Shenzhen companies) or the company Investor relations phone calls to the listed company for questions of concern, and then makes investment decisions based on its own risk tolerance and reasonable judgment on the company’s stock price. Do not habitually underestimate the severity of the incident that the company has made risk warnings or credulously believe in information disseminated through forums, Weibo, WeChat and other channels. (Source: Shenzhen Stock Exchange)
