I am updating my staus.
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OT UTA Joe will be happy. eom
If you are writing on a forum it's to distribute information. It doesn't make sense to write it in a language that most won't appreciate - let alone understand the subtleties.
English on a Chinese forum suggests that the reader wants to disseminate it not to Chinese but to English speakers, i.e. us.
That's ignoring the fact that we've seen every single point before and it's all been refuted.
rich
The stock can easily run up before earnings. If I had a position I would be tempted to sell going into earnings.
This company more than any I know needs to upgrade its auditor. I wouldn't hold this stock LT until they sort out. The potential of the firm is absolutely massive and they are faffing around with small auditors, sigh, unreal.
rich
(Disclosure: I sold LLEN to buy more CCME - the wisdom of this action can only be looked at in hindsight )
Seriously, they need a clearer sounding speaker or a transcript. There's no point in leaving your audience straining to hear.
rich
IDCX - for a few days North China Horticultural grabbed everyone's attention as a reverse merger by, I think, NEWN director. Looking at it again, several months later, nothing much seems to have happened.
I think I'll be removing it from my watchlist. Never took a position.
rich
SBAY - would seem to be on the menu.
GeoTeam would like to alert Investors to tread carefully with Subaye (NASDAQ:SBAY) shares, until we complete our DD process. Initial findings are turning up issues. we have informed the company's IR.
I'm really surprised about this one. But seriously, looking at these "sick" stocks is no bad place to start.
rich
CCME - your such a tease Joe.
rich
OK, so you should be trying to backup your argument rather than what we're seeing which is more "issues" that end up being refuted as well. Should be interesting, thanks.
rich
I guess a legal case against the "forces of darkness" ,FOD, will depend on if they knew their case was built on forgeries?
They will claim they used them in good faith. What we've seen is that a lot of the claims have been backed by forged documents. After the first forgery is there additional requirement that the FOD start check their validity before using them?
The second MW piece came out way after Chamin (or whatever he was called). If I was a shorter I would want to know if my facts were straight?
rich
From my quick look, FUQI was an accelerated filer and it announced restatement on 16th - so if you disagree with Mr Pearson's article (I don't remember liking it) you have to agree that we don't know we've got it in the bag until it's signed off.
http://www.sec.gov/Archives/edgar/data/1382696/000114420410013854/v177617_8k.htm
I wonder if anyone looked at this: when companies/accountants are most likely to throw in towel?
Anyway, it's not like we have anything else to do for the next fortnight
rich
CCME/FUQI - fair enough, it does look like FUQI was an accelerated filer and only announced a restatement on 16th of March or something like that. Guess we don't know if we get the accounts until we see it in print, what fun.
Something negative is written about CCME every day so, you know, there's a bit of hostility from the longs about media bias.
We'll see soon enough.
rich
Thank you for your 1st hand observations! eom
<Sarcasm> What a shock Rick was such a strong long.</Sarcasm>
Wish he wouldn't hold any position and wouldn't have to read his "none hit" articles (he claims).
I can understand him being weary but I wouldn't play a position expecting a restatement - since it's been audited by DT in 2009.
rich
It's not about bad blood, it's about doing a job.
We saw a whole heap of articles against CCME - I've seen nothing like this and I've invested in IOC. That timing and continual barrage required serious organization.
They weren't all in the office one day and independently light bulbs came on and they all started researching and writing. Then they released articles one after the other. This was all carefully planned.
Someone got all these articles produced and released in concert and they weren't written by people living on fresh air - there would be some form of compensation however it was achieved.
I find when money gets involved, whether it be robbing banks, divorcing partners or fleecing investors people do get very creative.
rich
They just didn't understand that they were given installed #s and not contracted #s
I'm sorry, there is absolutely no way they didn't understand the difference between installed and contracted. They knew exactly the difference and even talked about it in their Analysis. They said installed wasn't significant enough to allow for discrepancy - clearly they understand this area precisely.
Analysis
The representative claimed that the discrepancy between the SEC filings and the buses quoted to us was because
approximately 50% of the buses have not yet had equipment installed; however, this explanation does not hold water. As
we pointed out in our earlier report, one of the major discrepancies is in Shanghai. As of July 2008, the company claimed
to have 2,127 buses belonging to Shanghai-based operators in the network,1 but the materials the sales representative sent
only show 296 Shanghai buses as of January 2011. Thus, the overall discrepancy must be due to more than timing
differences between when CCME signs contracts and when it installs equipment.
IMO, these are smart guys asked to produce a report on a wrong premises (that CCME is a fraud) - however smart they are they aren't smart enough to fill in all the holes in the premise.
rich
Starr had to be given his choice of auditor and he choose Deloitte. One of the mad reasons why you wouldn't have brought Starr on-board unless you were serious.
rich
I don't think anyone disagrees with you. The record of CCME getting SEC docs in on time is very poor. Suspect that it's a combination of working in different country, not being an important client of Deloitte and company still learning the ropes/shortage of qualified staff.
rich
Muddy Waters best legal defense:
Yes, the operative word is IF.
If management had sussed out that this were indeed MW why not just give them information that is consistent with their SEC documents? Why navigate towards a storm?
If your argument is that CCME wanted this situation then you would have to accept that they wanted a short piece written about them and Deloitte to go forensic on them. Is that really a wise course of action?
MW specifically asked for a proposal to be created by the operator for them. MW need to detail the proposal using a recorded transcript & QQ files - we know they record calls and we want that first call they made to CCME.
They were in constant contact with this person (Analyst:Just as I told you yesterday). They could have told her to phone back and recorded from the start - this they didn't do - you can't come into a conversation half way in - especially as they seem to spin the events (see below).
If this was a reverse sting, why not faithfully translate the conversation? Why imply the company [we] instead of the individual [I]? Why omit the proposal was created for them? Their handling of the translation suggests they have something to hide.
Finally, even MW don't think that is what happened only Herb Greenberg. Funny, how they don't want to use that defense. CCME shooting themselves in the foot just makes no sense.
rich
WCTBills update comparing SG&A across sector.
Getting free content is just good business sense - and gives higher margins.
http://ccme-info.xanga.com/742669306/march-4th-2011--ccme---the-truth/
rich
Sweet catch indeed, credit goes to Eric. eom
rich
I have no legal knowledge. My only point is, assuming this is the correct translation, they failed to translate specific words that put things in a different light - looks misleading to me.
Perhaps someone with more legal knowledge than me can comment on your question?
rich
Instablog: Things MW's translator didn't want you to-know.
Assuming we now have the right translation - of particular interest.
1) The failure to translate "created" the proposal.
2) Used We instead of I - it's the Rep's actions not CCME.
There's other translating errors but they are the ones I found most striking.
Also interesting, it is also clear that MW wanted to imply this was a call out of the blue. However, the Analysts says "Just as I told you yesterday"
What fun, well, unless your MW.
rich
SA Instablog Another Interpretation of Conversation
Bold for words of interest.
Italics are comments by eric_wuwei
http://seekingalpha.com/instablog/743624-eric_wuwei/143838-full-transcripts-of-mw-conversation-with-ccme-salesgirl-with-my-comments
------------------------------------------
This is the transcript between MW and CCME salesgirl. Some of MW translations were in accurate, so I put MW's translation in () under my translation. Other wise, just copied MW translations.
I also put some comments in between. Hope this will help investors to understand what MW did.
Admission of Securities Fraud
Comment: where ? I could not find anything in this conversation indicating fraud of CCME.
Prologue
I. Because our analyst wasn't expecting the call,he was unable to record the first approximate two minutes.
II. The call resulted from Muddy Water's letter to Deloitte dated February 23, 2011
III. The voice of our analyst have been disguised.
Analyst: How do you want to me to talk with my manger ?
(MW: You want to talk to my manager ?)
CCME Rep: If you can, can you just tell him that the quoted proposal just contains bus number from selected high quality bus lines.
(MW: If you can, can you just tell him that the quoted proposal is for particular bus lines?)
Comment: After finishing reading whole conversation, you will understand the "proposal" refers to the bus spreadsheet she gave to MW.
Analyst: Talk to my manager ? But the manager who worked on this project and I are no longer working for the company. Does it still make sense to talk with him ?
CCME rep: Oh, he also left his company ?
Analyst: Yes, I could call him, but... Sorry, I want to help you - I don't want to cause you any trouble. So Could you please explain the situation to me ?
CCME Rep: The situation is just what I've told you. Say for example we have 1,000 vehicles, 1,000 is the number we quote to outsider.
But I have only quoted 500 vehicles to you, because these 500 vehicles are already signed with contracts and installed with CCME devices.
The other 500 vehicles don't have devices installed, so the number I quoted to you is the actual number of vehicles with CCME devices.
It is like this. The number I quoted to you is the actual number of vehicles with CCME devices, but when we make proposal, we are based on 1,000 vehicles.
(MW: but our company has asked us to claim based on 1,000 vehicles)
Comment: She was trying to cover her fabricated spreadsheet. However, MW put "our company has asked us to claim based on 1,000 vehicles" to her mouth.
Analyst: Ok, I see, but what's the relationship to your quoted price ?
Comment: MW tried to misguide her to talk about rate sheet. However, rate sheet does not have any problem. She only worried about her fabricated spreadsheet.
CCME Rep: There are some conflicts, For example...
Analyst: You've told me at the time that the base number is 1,000 vehicles to start - that's to say 1,000 is the base number.
It doesn't matter if you need 500 vehicles, or 1,000 vehicles, or 100 vehicles.
They're all based on the base number of 1,000. What's that have to do with whether the devices are installed or not ?
CCME Rep: When we reported to the details to the stock market regulator, we didn't report the number of vehicles we quoted you. The number we reported is multiplied by two, or doubled. Do you understand now ?
Analyst: What's the relationship between the number of vehicles you quoted me and the stock market regulator? I am confused.
(MW: What's the relationship between the price you quoted me and the stock market regulator? I'm really confused.)
Comment: MW translated "number of vehicles" into "the price".
CCME Rep: You still don't understand, do you?
(MW: You don't understand, do you?)
Analyst: No, I don't understand. The proposal you provided to me isn't some confidential business information.
Comment: MW was playing innocent here.
CCME Rep: There's nothing you can help me with right now.
Analyst: Does your company know what it's you the number I told you is the actual number, and not the number we've reported to the market regulator.
What we've reported to the market regulator is the number under contract. The number I've given you is contracted with devices installed.
Comments: Here she clearly stated that her spreadsheet was incomplete, only for buses with devices. Again she was lying here too. Her spreadsheet was just incomplete and with many errors.
Analyst: I see. And what do you want me to do to help you?
?
CCME Rep: I have one question. Have you told you colleagues I'm the person you contacted?
Analyst: No. I'm the only person communicating with you from my company. In my company, the person initially in charge of something is responsible until it finishes. What's the relationship between your proposal and stock market regulator? CCME Rep: There's nothing you can help me with right now.
Analyst: Does your company know what it's you the number I told you is the actual number, and not the number we've reported to the market regulator.
What we've reported to the market regulator is the number under contract. The number I've given you is contracted with devices installed.
Comments: Here she clearly stated that her spreadsheet was incomplete, only for buses with devices. Again she was lying here too. Her spreadsheet was just incomplete and with many errors.
Analyst: I see. And what do you want me to do to help you?
?
CCME Rep: I have one question. Have you told you colleagues I'm the person you contacted?
Analyst: No. I'm the only person communicating with you from my company. In my company, the person initially in charge of something is responsible until it finishes. What's the relationship between your proposal and stock market regulator?
CCME Rep: Because we're a public company, we must meet the number of vehicles, and we've only installed devices on some of the vehicles, and some vehicles aren't installed with devices.
The number of vehicles we've claimed to the public is the total number, but the number I (MW used "we" here) gave you is the vehicles installed with devices. So there are some conflicts.
Analyst: Ok, I see.
CCME Rep: What really happened is that
Analyst: When you wanted to meet met with my manager, he asked me to communicate with you and make sure everything is ok through the finish.
Therefore, I'd be your only contact the entire time.
CCME Rep: That's good. If there are people checking with you about me, then just tell them you don't know me.
Analyst: Do not worry. I will definitely do what you asked. Actually those who were working on this matter have already left the company with my boss.
(MW: Ok, and actually those who were working on this matter have already left the company with my boss.)
There are only two or three still staying in that company.
I'm not sure if they're the people who passed out the information. But they don't know you, and I've never mentioned you.
CCME Rep: I as so surprised. The auditors who came to investigate are so sharp. They have the exact same proposal I sent you before.
(MW: I as so surprised. The auditors who came to investigate are so sharp. They have the same proposal I sent you before).
Comments: MW did not translate the "exact".
Analyst: Have you given the same proposal to other customers?
CCME Rep: Yes, we do, oh, no, I did not say to customers.
(MW: Yes, we do,)
Comments: MW was sneak here. He tried to get her to say the spreadsheet she gave to him is for all customers, which can be used as indirect proof of the legitimacy of the spreadsheet. But she rejected this.
Analyst: I mean, the proposal wasn't necessarily from you. Is it possible your colleague sent it out?
CCME Rep: Eh...I've definitely created that proposal. Because it is the proposal I made, and I can tell clearly.
(MW: Eh...I'm quite sure this proposal is mine because I know the proposal I made, and I can tell clearly)
Comments: She told MW she created (fabricated) the proposal (bus info spreadsheet).
CCME Rep: I'm afraid that the auditors might know some people from your company. They're very good. They'll keep on asking question until they get to the point.
Comment: Deloitte did very through investigation. But, looking for fabricated spreadsheet should not be the jobs of Deloitte.
Analyst: So you've been audited by the auditing firm ?
CCME Rep: Yes, but of course I didn't admit that I did this proposal. But what happened is very serious in my company. They're searching QQ.
I remember I've sent it to you on QQ. I'm in trouble.
Analyst: Delete it from your QQ.
CCME Rep: But I'm home now. There shouldn't be anything on QQ because our hard drivers have been replaced at that time.
Analyst: You mean your company has replaced the hard drives?
Comment: again, MW tried to get her to say CCME changed the company hard driver
CCME Rep: It is my computer's (hard drive)
(MW: My computer's)
Analyst: Oh, I see. Then you'll be ok.
CCME Rep: The problem is that they may find it in the server.
CCME Rep: I feel so bad ...
Analyst: I don't think they're able to investigate me, Are they able to find out who I am?
CCME Rep: I don't know. They might find your QQ, or they might talk with you. Just tell them you don't know whom you've been in contacted with.
Anyway, anything about China MediaExpress, please don't mention me.
Analyst: Ok, don't worry. I won't talk about you, and also I've left that company already.
CCME Rep: You say you've left that company, but you're still working for the old boss?
Analyst: Yes, but the company that was going to hire you doesn't exist anymore.
CCME Rep: You mean that the company doesn't exist anymore?
Analyst: No, the company still exists, but the people who used to work on this matter don't work there anymore.
So if the auditing firm finds the company, there's nobody there who knows what's going on. So you do not need to worry about.
(MW:So if the auditing firm finds the company, there's nobody there who knows what's going on.)
CCME Rep: Is it possible that any of your colleagues have passed on the proposal?
Analyst: All of them have this proposal because I sent it out to them before the meeting so they can prepare.
The chance of leakage from my sources is very slight.
CCME Rep: Maybe not possible, but maybe they found out from the managers who were at the meeting.
Analyst: I don't know. Maybe the computers in your company were hacked.
Comment: Shame on MW for lying to her!
CCME Rep: Really?
Analyst: I don't know, but anything's possible.
CCME Rep: It's lucky that I didn't leave my phone number on the proposal.
(MW: It's lucky that I didn't leave my number on the proposal.)
Analyst: If someone calls me asking about you, I'll definitely tell them I don't know. Don't worry, the chances are very low.
CCME Rep: Ok...
Analyst: If there's something you need help with, you can always call me.
CCME Rep: Thanks...
CCME Rep: Please tell the manager not to pass out this proposal to anyone else.
Analyst: Ok, ok.
Analsyt: Ok, actually the proposal isn't useful to us now. Just as I told you yesterday - this matter won't move forward.
So don't worry, and I'll tell them to delete it. We don't keep things that we're not using.
Comments: they made phone calls yesterday.
CCME Rep: How many people were at the meeting?
Analyst: Maybe seven or eight, and not all of us have this proposal. Each person on our team handles different things...
Some focused on Bus Online, some are in charge of China MEdiaExpress, and some are in charge of other media companies.
For example, my colleague got the proposal from Bus online. He’ll email it to me, and of course I'll email your proposal to him as well.
And our company isn't big; there are only a few who know about this. So you do not need to worry about.
Comments: She was still suspecting that MW's team gave out the spreadsheet, so she kept asking questions.
CCME Rep: Maybe the auditing firm was asking around and found your company.
Analyst: Most people in my company don't know about this. Even if the auditing company asks them, they'll have no idea.
The people who were working on this case have left that company, and I'll tell my colleagues and manager to keep quiet.
CCME Rep: Just tell them that this proposal contains only the buses from high quality bus lines.
(MW: Tell them that the vehicles we quoted before are all for particular lines. That is yet.)
Analyst: Ok, ok
CCME Rep: Well, thank you.
Analyst: You're welcome. If you need any help, just give me a call. Don't worry. It'll be OK.
CCME Rep: Ok, bye.
Delete Me (look at this again later) eom
MW Harddrive player in the Initiation piece, pg10 [1] looks like the type in the magnolia drives in the video [2] (Time 2.21 & 7.42). I'm trying to find one of WCTBills videos looking at CCME's hardware (I know he says he's seen nothing like anything he's seen).
MW taking picture of the wrong ad player, on a Magnolia Bashi bus, would be consistent with their miss-identification of the bus line as being CCME. Not proof that's what he did but interesting that they are the same.
rich
[1] http://xe7.xanga.com/a85f7ae702130274812215/b219054271.jpg
[2]
CB: Also co-authored: Doing Business in China for Dummies according to this link (same guys face).
http://uschina.usc.edu/article@usct?commentary_botching_retail_in_china_11154.aspx
Hasn't he been busy...
rich
Carson Block's China Business - I think it was self storage....
http://www.cityweekend.com.cn/shanghai/articles/blogs-shanghai/shanghai-spaces/expert-advice-carson-block-tells-us-the-benefits-of-using-self-storage-services-in-shanghai/
rich
I thought that as well. We probably need another take on the translation.
MW MO is to create a business that would need the business they are investigating. A business needing to advertise in this case.
rich
That's true they whipped us and I would be surprised if that was it. Certainly Herb was today's hit from the blue. They are organized and resourceful so you'd expect a plan B & C.
Still, Plan A would be to give the best information to the guys with the reputation. You want the Rhino hunters to bag the big game instead they are looking incompetent fools who had rings run around them by sales Rep (their version of reality). MW with a successful hit would take this stock to the pink sheets in double quick time.
They used Citron as a sucker punch to mask the MW punch - clever but can Citron hit again?
Anyone else is going to need an introduction and time to get 'respect' - so many fraudulent SA pieces. It's a tight schedule and they are going to have to square off against Deloitte - assume we get 10-K. It's making things unnecessarily complicated and tight.
rich
I can't see how it changes the results - just the day of announcement. As long as hedgefunds can create more volatility they are happy. (I don't think of this as shorters... I think of this as funds creating volatility)
BTW: If mystery person is sales rep for CCME they aren't going to remain a mystery. They have her voice and know she passed information through QQ, seriously, she should just hand herself in now and turn evidence. Also, half way through there was some other voices... I would totally rev the sound up and find out those voices as well.
rich
Hmmm... suspect by giving it at CC they get a business as usual perspective.
I would be happy for them to respond as long as they have collected everything together and ready for shock and awe.
Anyway, we'll see...
rich
I see, it's the NEP situation... company under pressure goes quiet. Option holders get it in the neck.
If I had to guess they want to sort it out with conference call - but my guess is as good as anyone elses.
It seems one of the ploys that hedgefunds are using is giving information last minute to delay results. Expect they are hoping they can, sigh.
rich
If a company had unanswered questions I would be the first to demand an answer. There is nothing.
If you deny lies then it gives lies credibility - everyone thinks there must be something in them. MW also gets to play posting ping-pong with the company - making for very muddy waters indeed.
It's far better to get analysts and auditors access to information and find the answers themselves. I hope the company has been putting together third party information, as GH said they were.
Deloitte have been given in writing from the shorters how this company is a fraud. They aren't just going to walk into this blind. Or perhaps we are to believe they are as easily hoodwinked as MW?
rich
The perfect foil for shorters. They are creating FUD and he is saying don't take risks. Made for one another.
rich
Everyone was looking for Rhino 2 - who better to pitch it to them than MW?
rich
Proper researchers check sources and find different ways to get to the conclusion. If they rely upon one source they deserve what they get.
rich
If that was the only information he knew then possibly - but why then comment on something you haven't followed? Other than it's the topic de jour.
If he's followed it then it then the company suicide pact doesn't make any sense. We need a SA that hits the wires that explains the illogical suggestion, not going to happen though.
rich
The most sophisticated investors, institutional shorters, got hoodwinked by PR clueless company.
I might believe that one shark, sharked another... but still it's reads unlikely to me.
rich
Indeed, they picked up the gun and shot themselves.
Why didn't they find another way of finding information. They could have gone and counted number plates on a bus line with CCME screens and found independently.
Why was their only way of debunking CCME getting a marketing doc? Poor researchers indeed.
Why did they choose CCME? Nobody forced them to. Their choice. They had infinite research time - if it was a fraud there was money to be made whenever brought to light - they couldn't even keep the short on - real conviction shorting.
rich