China Paradise investors cash in after share price drops 20%

Combined share placement of $153 million triggered by expiry of post-IPO lock-up.
A number of pre-IPO investors in consumer electronics retail chain, China Paradise Electronics Retail have cashed in part of their holdings through a joint HK$1.19 billion $153 million share placement on a day when the share price plummeted 20.4%.

The price declined after the company gave what was interpreted as negative guidance on its gross margins for the first half in its 2005 results announcement. But according to people familiar with the offering, the investors had decided to sell even before the announcement - since their six-month post-listing lock-up expired on April 14.

ôPrivate equity has a track record of making good investments but to sell as quickly as they can,ö one observer said,...
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