Suddenly, ShengdaTech, Inc. (PINK:SDTH) crashed down hard last week. On Friday, the stock lost approximately 93% of its 
price, while its traded volume reached over 3 million shares. In this way, the market price of SDTH fell down to $0.250 per share and amazed investors.
The only explanation on the great fall appears to be the latest announcement by ShengdaTech. Last Thursday, the company filed with the SEC an 8-K form with some events that have increased a direct financial obligation of SDTH.
According to the document, under the terms of an Indenture from May, 2008 between ShengdaTech, Inc. and The Bank of New York, holders of the company’s 6.0% Convertible Senior Notes due 2018 had the contractual right to require the company to purchase on June 1, 2011 any or all of the outstanding notes held by each such holder at a purchase price of 100% of the principal amount thereof, plus any accrued and unpaid interest up to but excluding the purchase date.
SDTH did not pay the purchase price for the Notes and now the aggregate principal amount of the notes, plus any accrued and unpaid interest and any other amounts due and owing on the notes could be declared immediately due and payable by the Trustee or by holders of 25% or more of the aggregate principal amount of the notes.
Obviously, the announcement discouraged traders and SDTH stock price aimed the bottom of the chart at once. Now the question is how long the fall will continue.
ShengdaTech Inc. is an innovative company with a research and development program representing China’s aspiration to move from “made in China” to “created in China”. Historical data shows that on May 16 this year the company has received a letter from Nasdaq stating that, based on the review of public documents and information provided by SDTH, it has been determined that the company’s failure to timely file its form 10-Q was in violation of Nasdaq listing rule and served as an additional basis for delisting SDTH’s securities from the exchange.[BANNER]
On May 20, ShengdaTech issued a press release announcing the receipt and contents of the Nasdaq Letter and providing an update on related and other matters. Still, SDTH stated that there can be no assurance that the company’s appeal for continued listing will be granted, or even if it is granted, that the company will be able to execute such request in a timely manner or to the satisfaction of Nasdaq.
Along with all above-mentioned obstacles, ShengdaTech was banned of displaying its quote on the otcmarkets.com website. In this way, the company was labeled “Buyer Beware” due to a number of reasons mentioned on the website.
Meanwhile, investors keep waiting for the missing financial report of SDTH, which however, is not ready yet.
