is...hopefully making money
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and increasing exec pay was more than offset by the tax savings from holding the Mongolian property
IMO you are missing the point. They didn't just increase salary expenses by a nominal margin above cost of living, they jumped it up 400%. I don't care what accounting methods you want to use to justify it, it is a reckless move in the wake of declining margins and declining revenues. If they cared at all about IR, they would have forgone gratuitous increases until they get the retail operations producing enough profit to offset the wholesale plunge. Considering how much more profitable wholesale operations are, this is going to take them quite some time IMO.
They sent a clear message to shareholders, they are more concerned about lining their pockets than they are returning any value to their shareholders. Sheeh, a common sense approach would be to take a look at the stock price and realize they are in no position for a major pay raise.
If you think that management walking away with 400% more money while your stock value plunges is acceptable, then I wish you all the best in your future investments...I believe you'll need it.
Then you ought to pick some more up when it hits .40 because that is where this is headed. All IMO of course. With everything going on in the RTO space right now, I can't believe they would make a decision to increase salary expenses 400% YOY while their EPS is rapidly decreasing. It just shows a severe lack of fiduciary responsibility to their shareholders.
Can you imagine the shareholder outrage that would ensue if the CEO of an American publicly traded company walked away with a bonus equal to 15% of quarterly net income while sales and net income were plummeting and CapEx was going through the roof?
So let me get this straight...YOY quarterly EPS drops 55% and they think that shareholders are going to be okay with a 402% increase in salary expenses and a $388k bonus to the CEO? LMAO - what a friggen bunch of jokers. That CEO bonus was 14% of quarterly net income for the entire company. That would be akin to Steve Jobbs getting an $826 million quarterly bonus. Not even when the company is soaring does that happen, let alone when revenues and net income are taking a dive.
If any of you want my shares you can have them first thing Monday morning. This company is a joke. F^%$# clowns.
"Salaries and related benefits increased $629,181 or 402.1%, which was mainly attributable to an increase in salaries of approximately $227,000 and an increase in bonus of approximately $402,000 which included a bonus paid to Dr. Liu, our Chief Executive Officer, of approximately $388,000, in order to motivate our staffs and to ensure a stable and loyal work team for our long term benefit and success. We anticipate that our salaries and related benefits will remain at its current level in the near future."
Volume 400 shares today - lol, hasn't even traded 4 Benjamins today :)
I guess we will know soon enough :) Thanks for the reply Pappy.
Pappy, in your opinion is this stock dead in the water? Volume is anemic and it can't seem to get any traction in the 1.20s. When are you anticipating the next earnings announcement?
Technicals were overbought going into earnings so it would take good earnings or mgmt guidance to sustain the momentum and today's volume told us those things are likely not going to meet expectations tomorrow. Congrats on getting out with a profit. I suspect you will have a chance to get in much cheaper in coming days.
That said, I hope I'm wrong because I'm still in :)
Wowzers, epic selloff. Down 18% on 4.5x average volume. It seems that earnings leaked and it sounds like they were a huge miss. Hope all the longs are ready to pucker their corn holes tomorrow morning because it will be ugly.
It looks to me like many are planning for an earnings disappointment tomorrow, or at least feel that the recent runup is toppy given earnings expectations.
I'm going into earnings tomorrow with a tight stop-loss. If earnings are good we go green, however if they are bad the downside potential is significant.
H3 - to reply to your message - I am averaged into BFAR at .16 and consider that to be a very high risk/ high reward investment. Quite frankly, I consider the chances of them being a fraud very high based upon the turnover they have had in key positions within the company, poor IR, delay in filing and other red flags. My position is small enough that I am comfortable with the level of risk it creates for my portfolio. If they do end up filing, I think we see an extraordinary bounce. If we haven't heard from them in another 2.5 weeks I'm pulling the plug.
Well, now we know why the price action has been the way it has been. GFRE appears to be another total fraud. I'm pulling all funds from the space and am going to take much satisfaction in watching the entire China small caps space continue to implode. The PRC government seems very content letting dozens, maybe hundreds of phony companies operate and steal money from foreign investors. No surprise from a government that censors its people, commits human rights atrocities with regularity and employs ruthless mercantilist methods to steal foreign intellectual property because they can't seem to develop their own organically.
If they spent half the time that they do lying, cheating and stealing they might actually be able to produce authentic products and services.
My guess is that we will find that GDP numbers have been chronically falsified and that inflation is much worse than PRC authorities have led onto and that we will see a massive implosion of the Chinese economy in the next two to three years. China = fraud. Period.
I'd say it's a coin toss right about now whether or not a meaningful recoup, however short lived, will happen. On the one hand, the company could surprise everyone and continue to delay the offering and/or try to PR their way out of this mess, however, on the other hand future investors may have been so turned off by this stunt that they don't even want a short term flip. Long term my gut tells me the stock is doomed.
As an aside, the PR today made me laugh till it hurt. What did they think was going to happen? Did they really think people wouldn't panic when they annonced an offering at under 1/4 of book value? Crooks or painfully stupid? You choose :) either way it is a no win.
Again, I hope your strategy works out for you. GL!
Ha, thanks. It is always fun to see who gets that name and who doesn't.
Glad to see ltus busting a serious move hear. Also glad that I added more in the .70's :)
Someone at the RedChip conference likes what they are seeing. All buy side action today on heavier than normal volume.
So did you use the news pop to exit or are you still haging tight?
OT: I like the way you think. Have you ever read a book called "The Singularity is Near" by Ray kurzweil? If not, I highly recommend it. The premise of the book is about how we are at the knee of the curve of exponential technology growth and if you can live to 2030 you will live forever. Sounds crazy but he makes a very compelling argument about how it may unfold. His opinion is very highly regarded in the world of academia, the tech community and the political community. He is also an unwavering optimist. He was science advisor to President Clinton.
There's nothing one can trust here. Evidently that's the way it's always been. I just didn't realize it.
Right there with you. I sincerely wish you the best of luck on your exit. I hope you catch a nice pop and get out on a high(er) note!
Your premise assumes that people care what their numbers are. Clearly management didn't feel that they could garner a better price for their offering or they would have waited. My best guess is they are a scam and feel the hammer is about to get dropped on them so they are rushing to get out whatever money they can.
Stark 180 from my point of view just yesterday before the news, but after a company tells us "we are only worth 1x earnings and are therefore going to dilute shareholders at that level" it's time to run for the hills.
Oh well, that is the nature of CGS these days. Some are going to rapidly appreciate; many others are going to blow up in your face. Thus the search for legitimacy continues. Seems like a needle in a haystack in this space.
Anyone up for creating a US shell company, listing on Shanghai and stealing back as much Chinese investors' money as possible? I'm thinking the shell company will be one that sells advertising space on rolls of toilet paper to the untapped US trailer park market. I figure they've insulted our intelligence enough, it is time for some good old American payback.
Disclosure: I am just kidding. There is no need for anyone at the SEC to stop surfing porn to monitor my activity.
Lol, this wasn't the way that I envisioned getting there - but I am playing the drop for sure. Got some .32's after striking out at .30. Time to start flipping.
Some companies deserve a PE of 1. I don't think CKGT is one of them. Revenue and EPS growth is healthy and cigarette business continues to expand. IR is lackluster, but that can easily change as they become larger. There is more potential here than the market is giving credit for and IMO that is mostly because of sector fear.
Keep in mind that even companies with top notch IR are getting obliterated right now. This is a sector crash not an exclusive referendum on CKGT.
When sentiment reaches an all time low and everyone feels compelled to sell out of sheer frustration, that is usually my sign to start buying.
At these prices I feel very comfortable accumulating. I believe that a year from now hindsight will paint this period as a stellar buying opportunity for the non-frauds in the space.
A lot of companies have halted already increasing scrutiny and making it much harder for the remaining fraudsters to stay hidden. The fact that they haven't all been sorted out yet is what is creating this buying opportunity. If you have a high tolerance for risk and think that CKGT is likely to be legit, this is simply a fantastic time to accumulate. If we see $.30's I'm backing the truck up and putting it in park.
Sign of the times IMO. Almost all Chinese micro caps are getting the beating of a lifetime. Many are frauds and the rest are being treated like frauds because very few can tell the difference anymore. It is going to take a lot of time to sort this mess out, and it is clear that very few firms are comfortable sticking their necks out until things settle down.
All good news is getting treated like bad news because if the numbers look good, the company is called a fraud. If they issue a positive PR, they are accused of being a pump and dump. If they are quiet, they are accused of being a fraud and going dark. It is lose - lose for legitimate companies right now and they know it, so they are holding back as are their IR firms.
One thing is for sure IMO, the companies that survive the era of fraud are going to be multi-baggers from their current levels. I think CKGT is likly to survive this, but please do take with a grain of salt because I also thought CCME was legit right up until about 2 weeks before it was halted :)
Picked up some .43s today but only got a partial fill. That helped me average down to .60. I'm confident I'll be happy with that AP long term.
If we knew then what we know now :)
I hit the .205 blue light special and have some bids out for sub .20's if it goes that low.
I think is is the recent demise of CCME and others that are dragging all the other CGS with them. My personal point of view is that we are getting late 2008/early 2009 prices again and in a year or less when the fraudsters are flushed out we will see another bull run. There are plenty of good companies left to chose from. We may have another 20% or so to go before we get there though. That is why I am averaging in right now, not jumping in head first.
I picked up some $1.48's today and will buy more if it goes lower. I'm loving the Chinese microcap fire sale. I smell another 2009 type of run coming after the fraud flush out concludes. Buy it when nobody else wants it!
I had a stink bid in for .05 and it hit today. All my low bids are hitting across the China micro space. Picked up cheap CKGT shares today too. Sector is crazy right now for sure. I can't resist bargin hunting though.
I had a standing buy order for .60 in and was suprised to find it hit today. I'm considering adding more if it goes lower.
Been loading up sub $.70's. I haven't bought GKGT since early 2009 but I see a lot of value and opportunity at the current prices and, like Gary, will be looking at the ciggy sales as a key indicator for future business.
Definitely looking forward to Q4 results.
If CCME would only...
Those are the words that I have uttered myself and heard on this board many thousands of times. Yet, as always, we are left with nothing but a common sense approach to evaluating the situation, because the company, after over 1.5 years of being raided and attacked by shorts, has been completely inept to respond to their accusations and assaults in a factual and meaningful enough of a way to put them to rest. Further, they have done nothing with their “Moat” of cash to protect their shareholders. I personally sent Jacky multiple emails regarding my concern over the burgeoning short interest and warned of an impending bear raid, yet they were all ignored and the company did nothing to prevent the attack.
The question that should plague everyone on this board is why can't CCME put an end to the claims that they are a fraud if they are as successful and large as they claim they are? Further, the following is a list of questions and concerns surrounding CCME that I feel use a common sense approach to analyzing the situation and lead to my conclusion:
1. When short interest was approaching 50% of the float well over a year ago, why did CCME do nothing about it but head fake a share buyback, unless they had nothing to fire back with?
2. Why would a company with hundreds of millions in cash reserves and unparalleled cashflow hire a third rate PR firm, especially considering the negative reputation that they were drawing and the startling lack of institutional interest in the company?
3. Why would insiders sell at preposterously low valuations with record earnings right around the corner? Was there really a better investment out there that demanded money so urgently that it warranted dumping a stock that had all of the promise in the world only months before a 10-K that would be sure to knock the socks off the market?
4. Why did it take an advertising company that is worth hundreds of millions of dollars being publicly proclaimed a fraud to revamp their disgustingly amateur website? Last I heard, companies worth that much have marketing people that they hire to keep up the image of their publicly traded company.
5. The biggest question for me - Why have no major analysts covered one of the "best value stocks in the world?"
6. Why can the company not provide conclusive evidence that they exist on the scale that they say they do? FMCN doesn’t seem to have any problem validating their business. CCME fraud accusations have been rampant for over 1.5 years now and the company still has not done a single thing to put those claims to rest once and for all. I mean, how hard is it to prove a business as simple as CCME’s?
7. Why would a company with the cashflow of CCME continue to raise capital at incredibly low valuations? This point was well chronicled by Rato.
8. Why has Starr not commented about the legitimacy of CCME? Aren’t they major stakeholders with unfettered access to the company’s operations and finances?
9. Why, to this point, has CCME still not announced a share buyback? Oh yeah, they are waiting for just the right moment to spring that on the unsuspecting shorts, right?
10. Why have they not provided any indication as to why they halted the stock intra-day?
11. Why has the company not mentioned a single word about renewing their “exclusivity agreement?”
12. If the company has so much cash, why not issue a one-time dividend to reward investors and punish the shorts or anything for that matter that would prove the presence of cash, deter shorts and reward faithful longs?
13. If there is institutional interest in the stock, then where is this volume coming from? The entire float is traded every 6-9 days, so clearly the float is not “being locked up” like I have seen claimed here for over 1.5 years now. Clearly most of the float remains in the hands of retail and traders, not institutions.
My gut tells me that the answer to these questions is that the company is likely to be, at least at some level, unauthentic. If they are not unauthentic, then they are one of the most poorly run companies from a PR perspective in the history of the stock market. That may sound like a facetious statement, but it is not. If CCME is 100% authentic (not likely IMO) then the fact that they are trading at 5x earnings and have been unable to hold any reasonable valuations is clear evidence that they are poorly managed.
I strongly urge everyone to put all emotions aside and use some common sense here. Either we are all smarter than Wall Street, which has had plenty of time to vet CCME by now, or we have been duped like thousands of other investors in dozens of other Chinese frauds. Which do you think is more likely?
Disclosure – I lucked out and got out of dodge prior to the halt. I have no intentions of shorting CCME.
Very well put. The problem with forecasting the progress of nation states is that, like with many topics, people tend to use the intuitive linear approach for their calculations. In simple terms, they take how things are now and they project that in a linear fashion to forecast where we will be in the future. The problem with that approach is that assumes a vacuum, that nothing significant will happen.
For example, America is relatively idle right now primarily because we have not had a new wave of high paying jobs since the technical revolution in the 90's. Hence, middle class wages have been stagnant for about 15 years now. People are projecting our current status in a linear fashion onto the next 30 years as if our current progress is fixed, with no hope for any variance.
If America were to have a breakthrough in clean energy, bio-meds or nano technology, we could see a growth spurt equal to what we saw in the 90's and all this talk about America on the decline would vanish as quickly as it started.
As per other countries on the rise - China, India, etc. they have a lot of problems to sort out before it makes any sense to try to judge with any degree of accuracy where they will be in 30 years. Japan and Russia are excellent examples of how things can change abruptly. It is, of course, a possibility that they will figure out sound solutions to problems as they develop and that they will surpass America's economy. It would be reckless to say that is not a possibility at this juncture. I happen to think it is less likely to happen though because of the level of creative capability America has in the form of human capital coupled with our system of free enterprise.
Time for a $4 day today. Bull rush going into earnings.
Time for a $4 day today. Bull rush.
You're not kidding, that was the worst I've ever seen. May God have mercy on us all :)
UpstateChris - thanks for the response. My email looked the same.
I'm going to touch bases with a few of the ambulance chasers that are considering a case against CCME and see if I can find out what angle they are going to try to play. I'll let the board know what I find out Monday morning. One of the offices is down the street from me.
That is what has to happen IMO. I want the headlines to be "CITRON found that there was a sleeping dragon lurking below the Muddy Waters"