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I don't know anything about DEER, but it's hilarious that they publicly question if Alfred Little 'exists'. They definitely should get Donald Trump to investigate.
I guess it depends on how you count, if you include April 7 (the date of his letter) then the week was up today. They didn't make a filing when he submitted his letter, so my take is that the filing indicates that the resignation is now in effect. Sorry to say, but it looks like Cheng is still stonewalling.
This filing indicates that a week has passed and Kung's resignation is now effective - IMO.
Here's the Carson Block followup interview, he's going after IPOs and promises 'surprises'.
http://video.cnbc.com/gallery/?video=3000016286
Hmm, does Starr have any restrictions at this point, that would prevent them from selling on, say, April 4th?
With the high borrowing costs and options interest, the pressure on Nasdaq to delist CCME must be extremely high. If they agree to CCME's plan (assuming the company even comes up with one), the halt will last months and a LOT of money will be lost.
Nasdaq notified CCME they have until the 31st to send them a plan, and CCME is required to issue a PR that it has received the notice from Nasdaq. All this tells us is that CCME hasn't submitted a plan yet. I'm happy though that there is a date certain for CCME to respond, at least we'll know if Chairman Cheng is accomplishing anything.
The bizarre silence continues, they've been completely trashed as a company by their auditor, CFO, principal investor and independent board member, seemingly the entire Western media.... and they haven't said anything other than compulsory announcements regarding their own demise. Someone needs to take a video camera, put it in the CEO's face, and ask him WTF he's doing with his time.
So that's 7.75M on top of the ~7.8M short shares? How many long shares are in play when it opens?
Can anyone comment on the missing NT 10K? Did they not have to file it for some reason... perhaps because they have already stated they are not making the 15-day grace period?
To me it's starting to look like pinksheets was part of the plan all along, but would love to be convinced otherwise.
Is there any way shorts can avoid covering when a stock hits the pinks?
Of course there were issues, and it's also true that Deloitte was under pressure - it doesn't have to be one or the other. It's very possible the issues were beyond the normal scope of an audit, that could be the source of the conflict with Deloitte and management. Who knows? We'll find out soon enough.
"Our financial statements are audited by one of the Big Four accounting firms."
Well that's the best news I've heard since this debacle began. In the 'hope' category, I'd like to see Hank Greenberg assert control, bring in a world-class management team, convince another Big 4 auditor to sign up and get all of the dirt out, restate if necessary, and establish a floor for this thing to rebuild. And bring on FH to conduct a marketing campaign, to date the shorts are the only ones who have conducted a marketing campaign about CCME and they've been quite effective.
As much as I have liked the management at CCME - they seem like nice people, etc. - I think they were a provincial group that was in way over their heads for a company that was building out a national ad network and listed on Nasdaq.
Hempton told the story about Greenberg responding to a crisis, it will take this kind of assertion if there is any chance that CCME will become a turnaround story, even then it would take a long, long time.
"I know someone who was on a trading floor for AIG in Taiwan. There was a big error and it potentially exposed AIG to hundreds of millions in losses. Everyone was kept silent because if it leaked then people would front-run AIG closing their position and thus increasing their losses. People slept at their desks.
But the next morning – fresh off the private jet from New York – there was Hank. He had come to take control of the situation – and he stood behind traders as they solved the problems for minimum losses. "
Relax, there will be a filing within a day or two, wait and see what it says.
Or maybe he didn't manipulate the financials. Maybe Starr and the board fired him to bring in someone with world-class experience, looking at Jacky's resume I see he has never been a CFO before. That would fit with firing the Equity Group firm and bringing in world-class IR.
Just sayin', we can speculate in all kinds of directions. And not that I didn't think Jacky seemed like a good guy and all, but if I was Greenberg and Deloitte resigned on my $60 million investment, I'd probably lose patience. Greenberg probably knows a few good CFO's.
I agree with this, I'm withholding full judgment until I read the specifics of Deloitte's resignation. Who believes that we wouldn't have a signed 10K by now if it hadn't been for DeloitteWatch.com and a blizzard of misinformation, innuendo and hearsay. Deloitte had some incentive to get out of the hot seat, so there is some chance they sabotaged the audit, however miniscule.
The stock is f'ed regardless, but the halt may continue for a month or more and a lot can happen. Best outlook for a reasonable exit price is a forensic audit, by a decent auditor, that answers all questions and verifies a substantial business, and with all issues addressed by the company going forward. If the company gets that, then there is no reason they shouldn't be able to announce a dividend and let FH do its thing.
Worst case, the company slinks off RINO-style, ends up on the pinks, and is entombed in silence due to lawsuits, guilt and indifference to shareholders.
There are still many things that don't add up. For instance, if this is a stock pumping scam why didn't management sell any shares whatsoever? Why would they inflate their earnings to such a high degree that they would draw scrutiny and have to fake so much cash? They didn't just make the earn-outs, they blew them away. And why would they hire Deloitte?
Not that it matters, ineptitude can be just as harmful as deceit... but ineptitude, if corrected, may get $6 or more, whereas deceit may get $3 or less.
Yeah that's damning, though I'm curious about that phrase. Someone said it was in every resignation statement they could find from Deloitte, so it sounds like that is standard when they decide they cannot sign off. Could it it indicate a disagreement with management on principle, so they cannot rely on management statements? I wish we had access to the resignation letter. It will say a lot when we see who the new audit firm is.
Deloitte didn't resign because Muddy Waters was right when they mistranslated web pages, claimed some bus company had 9 buses, claimed there was no Apple distributor, etc. Exposing those lies can't be twisted into something unethical, though I suppose it makes for an easy target when you're looking for someone to blame.
No one knows the truth here. At this point we haven't got any idea what led the auditor to resign at this late date, or why the CFO resigned or was fired. It doesn't change the fact that the shorts published lies.
"Why are there no accounts of people visiting the office and getting a different take?"
Deloitte, CV Starr, Ping Luo, Fernando, wctBills, independent board members, countless others who didn't bother to publish an article about it... this blogger is the only one to tell that kind of story, maybe you should consider the source.
Well, since she doesn't know what 'it' is, she can't rule anything out. Could be CCME and Deloitte are disagreeing over something that doesn't significantly effect earnings.
It doesn't bother me that they are talking to their lawyers, I expect they aren't doing anything these days without legal advice.
If CCME comes out with earnings numbers that are essentially as expected, any other accounting issues won't matter. In fact it will just show that Deloitte really did look under every rock and strengthen the validity of the bottom line.
Thanks much, Joe. Sounds like something came up and the CEO views it as not 'significant'. IF it is a minor issue causing a delay, hopefully they will give guidance on earnings along with the news. Even if they announced restatements due to minor issues, the stock would rally if they preannounced expected earnings for Q4, IMO.
Great find Burp - thanks!
It doesn't add up, IMO. If you can make good money on city buses, elevators, lobbies, stores, subways, trains, airlines, even beauty parlors, then surely you can make good money on airport shuttle buses with a mix of high demographic business travelers and tourists on board. CCME has low costs as well, but still this new bit of hearsay makes no sense.
Interesting, FMCN seems keen to beef up their presence in tier 2, 3 and 4 cities:
"Our focus in 2011 will continue to be augmenting our core business and improving our value propositions to advertisers by: 1) Enabling interactivity of our core media resources; 2) Restructuring of our 1st and 2nd tier cities networks A and B to create more network capacity resources; 3) Expanding our 3rd and 4th tier cities network so as to increase our utilization rates in those cities."
Salty - here's all I know about it (not much):
-----------------------------------
Wednesday, January 12th, 2011
Shares of VisionChina Media Inc (NASDAQ:VISN) went up by 20.67% to trade close at $4.67 after Focus Media (FMCN) announced an investment of $61 million in the company.
A leading mobile digital television network opened at $4.20 and traded in the range of $4.18 – $4.72 with volume of 2.34 million shares traded. The stock has 52 week trading range of $2.51 – $11.85. The company currently has market capital of $336.90 million with total outstanding shares of 72.14 million.
The Company announced that Focus Media, China’s largest digital media company agreed to purchase 15,331,305 newly issued common shares of VisionChina Media for total consideration of $ 61 million. At a price of $3.98 for each VisionChina American depositary receipt it acquired, a 2.8% premium to where the shares closed yesterday.
According to Wall Street Journal, an entity owned by Jason Nanchun Jiang, the chairman and chief executive officer of Focus Media, JJ Media Investment Holding Limited (“JJ Media”) & an entity owned by Limin Li, the chief executive officer, Front Lead Investments Limited (“Front Lead”) each will acquire 1,022,087 shares for about $4 million.
The deal is expected to be completed in January, 2011. At the time of closing of the deal, each of Focus Media and the investors will pay 80% of the consideration and deliver a promissory note in the amount of the remaining 20% of the consideration to VisionChina Media. The payment under the promissory notes will be due on March 31, 2011.
This deal provides FMCN and its entity 15% & 1% stake in company’s outstanding issued shares. It will provide 17.2% stake to Front Lead, an entity beneficially owned by Limin Li. Focus Media, the Investors and VisionChina Media will also enter into a Shareholders Agreement and a Registration Rights Agreement.
Investors strongly believe that this agreement will provide an infusion of capital and a vote of confidence in the company.
VisionChina Media Inc. operates out-of-home advertising network using mobile digital television broadcasts to deliver content and advertising on mass transportation systems in the People’s Republic of China.
Then why did FMCN just buy 15% of VISN? Curious as to your thoughts...
And yes it's just hypothetical discussion based on a rumor.
Ha - that explains everything!
Interesting... didn't FMCN recently invest in VISN?
Nice description of the short squeeze setup - worth a listen.
What if no one sells? That's a very good day for longs! My price is $50, but only for half my shares.... what's yours?
"I give CCME a price floor of $30 and a ceiling of $45."
Nice mention in SA article.
http://seekingalpha.com/#article/256692-top-10-stocks-to-own-in-china/
Excellent work wctBills - I'm sure Rick Pearson will rush out an article on yet another proven Muddy Waters lie. Right, Rick?
Give the company the benefit of the doubt re communications, IMO. They are in a complicated position, they've been hit with an aggressive short attack that is willing to twist and distort anything they say. They've also been hit with frivolous lawsuits. Their audit has become much more intense than they could have anticipated and they have to do everything they can to ensure the auditor stays focused. And they have fired their weak IR firm and so temporarily have no strategy in the midst of this mess.
Between their lawyers, their auditor, and the IR firms they are likely interviewing, I'm sure just about everyone is telling them that the less they say right now the better. They did flatly refute the allegations - what else is there to say, really? Earnings will be the ultimate statement.
180 M in the bank? If so they have been spending more, which is what young fast-growing companies should do. Switow, lots of hiring - what else? Jacki mentioned a tour bus pilot program was in the works last quarter.
The stage is set for a stunning turnaround, in fact longs and shorts all agree:
---
China Media shares have fallen about 21% since Feb. 2, the day before your report was published. What is likely to happen next?
Where the stock goes depends on what its auditor does. If the auditor signs off on the financials, then most likely the stock returns to its prior level above 20.
---
Except $30 is more likely. Looking for this headline within 2 weeks:
"The China Stock That Was Too Good To Be True? It's True"
Here's the Feb 17 Global Hunter report:
http://www.scribd.com/doc/49047531/CCME
Summary:
We were in China last week to conduct additional due diligence on CCME. We visited CCME’s headquarters again, and reviewed all of its contracts with advertising clients and bus operators, tax filings, and bank statements for the last three years. We called or met 16 top advertisers, who verified a total of approximately $105MM of revenue or ~50% of our estimated 2010 revenue. We called China Telecom, and the exclusive advertising agents for Coca Cola and L'Oreal, who confirmed they have placed ads on CCME's platform. We also spoke to 17 bus operators, who confirmed that they have signed in aggregate 14,191 buses with CCME, or 52% of the total number of buses CCME reported. The amount of revenues and buses these advertisingcustomers and bus operators confirmed with us matched the numbers in the contracts we reviewed at CCME. Shanghai Ba-shi Public Transportation and Eading Group also confirmed their partnerships with CCME. CCME until 2010 had been focused on expanding its intercity bus network in tier II and III cities, and has utilized regional advertising agencies which have extensive local relationships, rather than many of the national 4A agencies. We believe this niche market position and unique approach has made them less visible but kept them very profitable. Based on our due diligence to date, our thesis remains unchanged: CCME is a leader in the inter-city bus advertising market with a unique business model and large growth potential. We reiterate our Buy rating and $26 price target.
AH - 80k at $13.50, 9k at $13.68
Exactly right, the idea that the caller somehow was 'hoodwinking' MW is as thin as everything else MW has tried to put forth. It won't hold up. It's clear the guy on the call had offered the caller a job in exchange for her information, was now claiming that he and his boss no longer worked for the fictitious company that was soliciting the information from her, and he was now supposedly going to help her hide her tracks - and his.
Muddy Waters is clearly implicated in this, Herb's theory has a half-life of about two days, IMO.
The company's approach - whether intended or not - looks to be working out. The short attack is failing due to the weight of its own lies, when the company delivers its blows the enemy will be very weak if not already on its knees. Good luck or good strategy? Don't know, but the 10K and whatever else the company has in the pipeline are going to obliterate the shorts, IMO.
Letting the shorts self-immolate?