China Stationary - buying by company selling by owner.

Following my post of China Stationary Limited on 31 May 2013, the price of CSL have dropped from 0.35 to 0.20 currently (42% drop!).

While this experiment of mine in China share have not panned out too well (my average price is 0.305) I found their latest move to be quiet perplexing.

1) Majority shareholder selling out
The majority shareholder have recently been disposing of its share in a series of transaction. The majority shareholder's latest shareholding today is approximately 30.8%, down from 66.9% in January.

2) Buyback
The company have initiated a buyback recently with the purchase of 9M shares at 0.205 last week. I don't know how to analyse this latest move but a buyback at this price is definitely accretive to shareholder - I hope the company will undertake more buyback.

Based on the net cash position of the company, the disposal by majority shareholder defies logic. It suggest that the majority shareholder think the company is less worth than the amount of cash the company claim to have.

The buyback and the disposal is opposite move by what essentially is the same set of players in this game, this exercise contrast with the move by YTLP.

I will retain my small portfolio of CSL - but would not care to add to them. My gut feeling is telling me to cut loss, yet I remain curious about the contrasting move by the management.