Harbin Electric Shares Plunged: 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 Chinese electric motor maker Harbin Electric (NAS: HRBN) sank as much as 10% in intraday trading today on above-average volume.

So what: Just last month, the stock plunged 60% on reports that its proposal to go private was a "sham" and then bounced 70% on news suggesting that the buyout was going through, so today's loss doesn't mean a whole lot in the bigger picture. Given today's sell-off in the overall market, it's no surprise that the small-cap, China-based, highly volatile Harbin is going along for the ride.

Now what: Expect even more wild price swings for the rest of 2011. As my Foolish colleague Matt Koppenheffer noted last month, the shares are still way below the proposed buyout price of $24, suggesting Wall Street still isn't convinced that a deal will get done. With the transaction expected to close in the fourth quarter, though, Fools won't have to wait too long to see who's right.

Interested in more info on Harbin?Add it to your watchlist.

At the time thisarticle was published Fool contributorBrian Pacamparaowns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool'sdisclosure policyalways gets a perfect score.

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