is...hopefully making money
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Yes, a staggering number for sure. Perhaps management was holding off on any non-acquisition cash plays to see if their most recent quarterly numbers would be enough to turn the tide. Now that we know it was not enough, they need to move quickly on a plan to address the assault on their stock.
Like I said in an earlier post, if I'm CFO and I see a short interest for my stock at 20% of the float, I am going to make addressing that situation a top priority. You can't expect to attract sufficient institutional interest under those conditions. Further, it is very concerning for all retail investors, causing excess turnover. I doubt that I am the only person asking myself - "do the shorts know something that I don't?"
Management needs to step up to the plate and shore up this “situation”
I couldn't agree more. Management sitting on over $100 million while their investors get their assess handed to them by shorts and dumpers is unacceptable.
Even a small dividend or share buyback would send a message. I don't know why they have not done this yet.
This activity tells me that the shorts are some deep pockets that have picked their target and will stop at nothing until they hit their target, which does appear to be in the $7 range. Think about it, they make money the whole way down and when they get it to their conceptual bottom, they cover at ridiculously low prices and make money on the way up. It is win-win for them.
That is why I have been so hard on this management team. They are doing a good job with the fundamentals of the company but they are failing miserably with addressing this assault on their company. We should have seen share buyback and dividend announcements by now. If someone F(s with you, you F$#(* with them right back. It's time to take the gloves off, and with their mountain of cash they can absolutely knock the socks off the shorts.
Either they really don't have the money (which I doubt is the case) or they just don't get it. WHY ARE THEY SITTING ON ALL THIS CASH WHILE THEIR STOCK IS BEING DESTROYED? I feel like I am taking crazy pills.
Mistype and now corrected. My intention was not to mislead.
Traderfan, While it is true that 30k shares isn't in and of itself overwhelming, what strikes me as very odd (and concerning) is the price that insiders are willing to part with their shares. They obviously don't seem to think the stock is going to fetch a more fair value in the near term or they would have waited out this downward spiral.
This company's fundamentals have been telling one story, but the market, shorts, and now insiders are telling us something else.
Seriously. I need guidance from someone who has some answers :) CCME has had me scratching my head and questioning fundamental logic for a year now.
This thing is going to have to run to $30 to satisfy the pent up frustration!
I do have a position, but it is less than it once was.
We are clearly in a situation where earnings and other fundamentals matter very little. If this MRQ's numbers couldn't move the stock then IMO it is because there is not enough retail interest to counter the lack of institutional interest. Perhaps that tide is slowly turning, but it is very disappointing that it hasn't turned sooner.
To the point of my most recent post, if earnings mean very little as it relates to generating shareholder value, perhaps CCME should consider some alternative ways of spending some of their mountain of cash - namely combating the shorts that are weighing this stock down.
I may have sounded very facetious, but I wanted to illustrate the point that since SPAC this stock has been in a very predictable pattern - run by the shorts. I suspect that the rangeboundness of CCME has also turned off many institutional investors, which creates a cyclical pattern. Big earnings > little action > rangeboundness > institutional investor interest fizzles. It is management's job to solve that problem. They have to find creative ways to market themselves or otherwise make the stock attractive to institutions and unattractive to shorts. Otherwise we keep on with this malaise.
As I type this the NASDAQ is up .77% and CCME is down 1.5%. We are only a few trading days after blockbuster earnings. Sheesh.
What we are experiencing is a phenomenon that I've come to call the CCME effect. We are presently in the 3rd full cycle of the CCME effect. The CCME effect is comprised of the following phases:
1. Gangbuster earnings announcement coupled with other seemingly excellent supportive PRs
<followed by>
2. A brief and grossly inadequate short term price movement
<followed by>
3. Weeks and weeks of shorting leading to a slow steady downward trend of PPS until all profit from the aforementioned short term price movement have been erased.
We are currently in phase 3 of the 3rd cycle of the CCME effect, post 2Q earnings announcement. What is deeply upsetting about this latest cycle of the CCME effect is that phase 2 didn't even get us past last quarter’s pre-earnings PPS level.
I think anyone positively citing the institutional activity of late is being a little over optimistic. A tad under 9% ownership isn't going to cut it. Not by a long shot.
CCME is in the midst of a dangerous cycle that, if the present track continues, it may never break out of. With 9% institutional ownership there is not enough retail strength to consume the float, so the shorts can continue to pile it on. Quants and hedge funds will continue to have a field day with CCME so long as the scale is tipped in their favor. Right now, CCME could announce 1,000% net income growth and without institutional traction we will simply repeat the CCME effect cycle. One of two things have to happen for any PPS traction 1) Institutional ownership has to hit 25% or more or 2) management has to take some drastic steps to protect shareholders from shorts such as by a share buyback program or dividend (which I know has been a major talking point on ihub).
Until one of those two things happen we will continue to languish with lackluster pps movement. While management has gotten a lot of things right (namely the fundamentals of the company) they have done a terrible job of protecting PPS by drumming up institutional support or taking other protective measures against shorts.
If I were CFO, I would take one look at the short % and discern that something must be done immediately.
I agree Ryan. Probably one or several large hedge funds shorting the entire sector. There is some MAJOR money at work here. Some big fund managers have recently announced they are deleveraging out of the US stock market. I doubt they are sitting in cash on the sidelines. They are taking short positions where they feel they can get the most bang for their buck, and China has a huge bullseye on it. So many of these stocks have a small enough float that they are easy to manipulate and the China "corruption" cloud only makes it easier for them to come in and throw their weight around.
It only takes a few billionaire fund managers colluding to bring an entire sector to its knees. When they move along, all of our gems will move up. That isn't going to happen until there are some more bullish signs in the world markets and things stabilize more IMO. Any mid-term period where you have 200-300 point fluctuations on a regular basis favors the shorts. That environment breeds fear which is a long’s worst enemy.
I don't think we will have a problem hitting 1 million shares traded today. It was very encouraging to see it pop off of $9 the way it did.
Another important question to ask yourself right now is, at what level are the shorts going to stop risking their money to take it lower? Just like a long asks himself/herself how much higher they want to ride a stock before it stops making sense to hold it and begin taking profits, shorts have to make the same decision.
I think we are at those levels, or very close. If the shorts stop flooding money in and CCME can gain even the slightest bit of momentum, it could be a fast move back up as they begin to cover. It could be as fast as we dropped that we see the PPS levels that we were all much more comfortable with before the meltdown.
Another great thing about any rebound right now is it is reciprocal - meaning that with any ascent, the chart begins to firms up, the TA starts looking much better and the retail people that were flushed out come pouring back in.
My disclaimer: If the DOW drops to the low 9000's all bets are off :) I’m not calling that, but there is definitely a lot of uncertainty out there about the global economic recovery. US Baby Boomers are taking their gains and exiting stage left in droves. I’m seeing this first hand.
I don't think that it is likely that it will break below $9 unless the general market further melts down. Judging by the volume yesterday and today, and the lack of insider filings (indicating that insiders are not selling), we will have chewed through a considerable % of the float and should bottom out. It is my opinion that today is a good candidate for bottom solely based upon the volume that we are seeing.
When I sold, I anticipated this type of quick crash to $9, solely based upon the current circumstances - increasing short position, TA falling apart, general weakness in the market, lots of negative China fraud news, but I didn't see it coming quite this fast. I thought it would take another week or two. It is probably a good think for it to bottom out quickly so that it can level out and begin the ascent. The $9 range is as low as I personally see this going, or at least it makes sense from a risk/reward perspective to be back in the game at these levels.
I'm back in for 2,700 shares.
It is amazing how much the Chinese small cap space has been obliterated since early 2010. Most of the value plays that are frequently discussed on boards are down somewhere in the 50% range since their late 2009/2010 highs. Perhaps the fund managers think that the real estate situation is going to send China into a mild recession, or at least profoundly stifle growth and are taking all of their money off the table? Any way you cut it, it is very obvious that there is a lot of money moving out of this space right now, and CCME is clearly not immune to it.
The million dollar question is when it will come back into favor again?
Sorry about the formatting -
Symbol Last 52wk H 52 wk L
CCME 10.34 14.82 7.35
LTUS 0.96 2 0.4
BSPM 3.08 5.51 1.69
LPIH 2.3 3.28 0.85
ONP 8.33 15.15 1.48
TSTC 9.13 24.94 3.4
CKGT 1.48 3 0.71
CPBY 5.36 7.97 2.56
CNYD 15.32 17 2
RINO 13.77 35.15 8.12
CNAM 3.75 11.1 0.8
PUDA 8.42 11.9 2.87
JADA 0.415 1.09 0.15
CCLWF 1 3 0.07
CSKI 11.98 25.45 10.82
NEWN 7.2 10 1.2
If anyone lives on the West Coast, CCME will be presenting at the 2010 China Conference at the St. Regis Hotel in San Francisco, CA. July 11-13.
http://www.ghsecurities.com/pages/ChinaConference.aspx
Sounds good, I'll try to dig it up and share it with the board.
KOOT (Kind of Off Topic) - I never thought that I would say it...but I think Jim Cramer hit the nail on the head <gulp> regarding the current state of political affairs and their effect on the market and private sector. This is a good Saturday read for anyone interested:
http://finance.yahoo.com/news/Cramer-Why-Obama-Is-Bad-for-tsmf-2364771359.html?x=0
Also, smallcapnetwork published another bearish article on CCME. Unfortunately it encapsulates my woes and summarizes why I felt it in my best interests to take the sidelines. If CCME gets analyst coverage and some big institutional interest, I'll eat my shorts, put on my dunce cap and march back in with my white flag raised. It just looks like a tough short term road ahead and I'm compelled to protect my 2009/early 2010 gains.
http://www.smallcapnetwork.com/Running-Out-of-Room-For-Better-or-Worse-Looks-at-HS-CCME-and-CRXX/s/article/view/p/mid/1/id/617/
Do you know where we could get a copy of the contractual agreement? Would that have to come from IR? I've always been curious about the terms of the contract, especially the timeframe of the agreement and if there are any escape clauses. I think verifying that the language is sound would be great.
The bashers on Yahoo! - though I know they have no credibility - love to tout that this is a shell company with no operations and that they are at the mercy of Fujian. I think it would be beneficial to post the contract online to put that debate to rest.
They have a unique structure - one with very few employees that contract the work to another company that CCME has close ties to -Fujian Fenzhong. This keeps their cost structure very low. I have always suspected that this structure has made some people uneasy because CCME doesn't own any equity in Fujian Fenzhong. Albei,t I am not an expert in reverse mergers and these types of shell business structures - so it may be very normal. Perhaps Drexion can better explain it.
CME, through contractual arrangements with Fujian Fenzhong, an entity majority owned by CME’S former majority shareholder, operates the largest television advertising network on inter-city and airport express buses in China. While CME has no direct equity ownership in Fujian Fenzhong, through the contractual agreements CME receives the economic benefits of Fujian Fenzhong’s operations. Fujian Fenzhong generates revenue by selling advertisements on its network of television displays installed on over 22,300 express buses originating in fourteen of China’s most prosperous regions, including the four municipalities of Beijing, Shanghai, Tianjin and Chongqing and ten economically prosperous regions, namely Guangdong, Jiangsu, Fujian, Sichuan, Hebei, Anhui, Hubei, Shandong, Shanxi and Inner Mongolia which generate more than half of China’s GDP.
That's true Drexion, however what you don't see with any degree of regularity is a stock that looks so pristine, with incredible growth and earnings announcements, multiple acquisition announcements, an up listing to a premier exchange and no traction in the share price. If everything with this company is so pristine, why are all of the institutional investors, which we know have taken a close look at CCME, giving it the cold shoulder?
Further, CCME has not exactly held strong during the pull back. It is down 23% from it's high 3 months ago - just ask anyone that invested in late April. That is more than the general markets have pulled back.
I am not implying that there is something disingenuous going on within CCME, and it would be irresponsible to impose such a claim as that without any signs. However, I do think that it has to be acknowledged that there may be other negatives out there that we simply don't know about. Can you answer why other Chinese advertising stocks like CNYD and FMCN have enjoyed considerable appreciation since late May / early June while CCME, with better margins, more cash and cashflow, better growth, etc. has been completely ignored?
These institutions are not a bunch of fools, they know good stocks when they see them. It should be deeply concerning to anyone long on this stock that there has not been any analyst coverage yet and that institutional interest has been basically non-existent.
I am sure people are going to call me a basher or a closet short for my posts, but I am very interested in this dialog and feel that anyone that has spent as much time as I have doing due diligence on this stock has a right to discuss these matters in earnest.
I do apologize to the board for calling CCME a POS. That was a cheap ploy and it was not warranted.
Traderfan - I can't PM but my answer to your question is yes, that is where I got out at. Troubling indeed.
LMAO - weak hand? I've been in this since $10.80 six months ago and it was my number one holding. I can read a crappy situation when it is staring me in the face and made my decision. It has been six months since the reverse merger and not one single analyst has touched this stock. Something stinks.
I do respect many individuals on this board and GCS board, and truly wish the best for all the longs. These are all my opinions and I don't plan on going out and shorting the stock. I never thought that my sentiment would change the way it has on CCME, but with all of the good news out and unrelenting selling, no institutional interest, no analyst coverage I had to ask myself tough questions and those ARE fundamental things that have changed with time. Fundamentals of a stock are not static and are not solely related to the business operations. If nobody on the institutional side will tough a stock it is often because they know something the retail guys don't. That seems to be the case now, at least IMO.
Tiesto makes a good point, I won't continue to post now that I am out. I will answer your question as my final post.
If we know that Institutional investors only have about 2-4% of outstanding shares and insiders hold 82%, who do you think is doing all of this selling? It's not rocket science, though it is easy to create some BS story of manipulation to lie to yourself to sleep better at night.
Today's activity proves this is not some small manipulator with 100k-200k shares. Everyone knew the Russell was accumulating today and that should have put a hold on any manipulation. A surge of 150k shares in the last hour could not even move this stock. That solidifies it that it is a HUGE seller that has been taking this stock down for weeks now.
The only potential HUGE sellers out there are insiders. Who else holds enough shares for the activity that we have been seeing? Nobody. The downside potential for a stock with 82% of its shares in the hands of insiders is unlimited. If one of them decides to pull out this selling can go on for months.
Something is very wrong. I got out today. I suspect some very bad news is on the horizon because this pattern stinks of insiders dumping.
And who in their right mind would call this a bullish close? 150k shares to the downside and a close BELOW $11. That as about as bad of a close as I could have expected. There are sufficient sellers at this price range to exceed buyer's demand. What the hell is bullish about that? And how about the fact that we are now .35 below the 200 day MA? Yeah, very bullish - pssst.
All signs point very south of where it is at now. I hope for all of the longs that I am wrong, but I don't think I am. $9 is coming I'm afriad.
Well, there is your volume and we are still going to close below the 200 day MA. That pretty much shreds the theory of someone manipulating the stock with small trades. A late day 150k surge of shares could barely bring it off of the LOD. This POS is going much, much lower. This has to be the biggest letdown stock in history. Thank God I'm out.
Though I agree that China will likely present the best growth story over the next several years, I cant dismiss what happened in 2008. China was growing at a rate of 8%, companies were making hand over fist, and they were still taken down to all time lows. Some of the stocks that we love now were trading for well under $1 with PEs of 2 and 3. I would be willing to speculate that everyone long on those stocks screamed about what a value play they were at each price drop.
When a sector or country goes out of favor, the downside risk is nearly unlimited. I am not overly bearish about the market right now, but I AM very, very uncertain about where things are going. I can't recall a time, ever, that I was so uncertain about what direction the market and economy were heading. At least in 2008 I knew they were going down. In 2009 I knew they were climbing out of the gutter. But 2010 absolutely blows my mind. 100-200 point swings every day, pundits preaching the DOW at 1000 and others a run up to 14,000. Nobody seems to know where things are going.
It doesn't help that CCME is acting more irratically than just about any stock I have ever seen. If you would have told me 6 months ago that the stock would be in a short battle and losing it miserably I would have told you that you are smoking crack.
No, I wouldn't do that to you guys. I have been teetering on the fence as to whether or not to sell. I have had good luck timing stocks and getting out at the right time - CKGT at $2.90, JADA at $.90 and others, and have made good money doing so. I have sunk those profits into CCME and now am getting my world wrecked. One big part of my problem is that I have a mid-term cash account that I will need to tap at some point, and I don't want to allow that money to go by the wayside.
It is a tough battle. I am long at heart, but can't make sense of what is going on and I have serious concerns over how low this stock can go. I keep telling myself that we will find support and then we fall right through. I don't want to get caught with my pants down sitting at $9 a share asking myself why I didn't see this coming and sell sooner.
Falling through the 200 day MA feels like the nail in the proverbial short term coffin.
I think everyone long CCME will see brighter days, but I can't in good faith make any estimate as to when that might be. God forbid this turns out to be a double dip recession. We've seen how low Chinese stocks can go. 2008 wasn't that long ago.
At some point, if and when things firm up, I may talk myself into a re-entry, but we have been pulling the positive mental attitude stuff for 6 months now. The question that I cannot answer is what does everyone know that we don't? Why would everyone be shorting a stock that looks like a gem? When a stock looks like gold but smells like cow dung, there is usually a good reason for it - but who knows? Not me - not right now anyway.
Cheers.
I doubt we are going to see much interest even at these prices. Not right now. It is terribly concerning that we crashed right through the 200 day MA like it was made of toothpicks. If the 200 day MA is going to fold like a cheap hooker, then I don't have much confidence that support at $10.50 is going to hold up. My guess is this going much, much lower.
This is reminiscent of CKGT - blow out earnings runs it up to $3, fundamentals are strong, everyone sees $5 on the horizon, then it tanks for 5 straight months shaving off 50% from its highs and has been limping along ever since.
I'm sorry that I am being pessimistic, but right now it is looking like we could see the $9s or worse before the selling and shorting subsides. It also looks like 2010 is going to play out as a very bad year for CGS. A year of giving back a healthy portion of 2009 gains.
I think I'm going to book my gains and ride off into the sunset.
The big question is who is selling? We have traded more than the entire float over the past few months. I am starting to get a bad feeling that this is insider action and that some terrible news is on the horizon.
How else can this be explained?
Well, looks like we are going to get there much sooner than I thought. Damn it.
Dan, though I understand and agree with your premise, it is one that assumes that the stock is not going to continue its downward trend which can, in and of itself, create more new weak hands. Look at TSTC and BSPM and CNAM, etc. etc. that have all lost HUGE % over the past 2 months.
Yep, $11.50 didn't hold up nor did $11.30. Next support is around $10.50, and at this point I wouldn't be surprised to see it fall through that. Again, I plan to pick my shares back up in the low to mid 10's.
I am still long CCME, but the shorts own this stock right now. If I feel that I can sell it in the low 11's and pick it back up in the 10's I will make money. In fact, that is the only way to make money on CCME right now, to get in the trading action. That has been the case for the last 6 months.
I'm still going to keep part of my core locked so that I can recognize some gains if it rockets.
Well, we just fell through support - so $10.50 here we come. I'm out today if we get any kind of pop fromt the Russell purchasing. I'll buy back in the low 10's.
Cool I'll buy your shares on a swing trade :)
$22 million is on the very high end of my estimates. I would be ecstatic if they hit that number, and I think the market would respond very well to it. Let's hope Jacky is out there working his magic to make it happen!
Good ole' mid day pop-and-flop. Old reliable :) I'm not upset by it, just amazed at how predictable the pattern is now. I am going to have to start trading with half of my shares. How could anyone resist?
In retrospect, the NASDAQ and the DOW have been just as range bound as CCME for the past few months. I will be very concerned if we close below $11.30 though. I'll probably pull the plug and plan on getting back in in the low $10's because that is likely where it will be heading. I can't take another plunge through a critical support level.
That didn't last long. Stayed up for a whole 15 minutes before giving back the gains. Shucks.
Doesn't the Russell index do it's buying this Friday?
Is CCME's next earnings release in early August?
I think that Herb Greenberg captures the essence of why we are struggling right now across most Chinese small caps. People are just scared to death that their investments are going to end up being a scam. The big money is clearly taking the sideline, as evidenced by our anemic volume across the whole sector, because they don't want to be the clowns that moved in big on a shell company that ended up being a scam. Further, a flood of shorts have entered the space betting that everyone's concerns are legitimate.
NEP, FUQI and others, along with the endless dilution that other small caps have engaged in is only making matters worse. It is going to take a great deal of transparency on behalf of the Chinese small cap companies to shed this stigma. 100% net income growth projections won't be worth the paper they are printed on if people don't believe them or think that the CEO might be embezzling funds, or worse.
Fernando/Traderfan I'd be curious as to what your thoughts are about Herb's cautions:
http://www.cnbc.com/id/15840232?video=1527186689&play=1