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Someone correct me if i am wrong, but I believe that all short positions that do not currently have borrow will need to cover and no new shorts will be able to be placed without pre-locating borrow.
Do you agree that there is such a thing as slander?
Bear Raid :
http://moneyterms.co.uk/bear-raid/
Hello SEC ... anybody home??
It's really interesting that there is no way of posting comments on the Citron site.
Seriously, what credible blogger hosts a site without a comments section in order to foment debate/get ideas?
Maybe I'm nuts but I really don't see this as anything other than a well timed bear raid (right before CNY; released at 1:30am China local time presumably after company officers have gone to sleep).
The Reg SHO clock is still ticking down, the stock lending rate at Interactive Brokers is still > 60% and there are still no shares available to borrow there. I personally don't see anything new in the accusations against the company in this piece that most of us haven't heard before, which leads me to believe that the piece was rushed in order to buy the shorts some time and volume. I would be careful discounting the possibility of a violent snapback when the Reg SHO forced buy-in rules kick in. Even if a certain amount of short covering took place yesterday, there were also a certain number of follow-on shorts nakedly selling to the ones covering.
New A-share piece out from Goldman Sachs:
"A-share market view
updates: partly cloudy to fair
Property tightening brings positive changes
Since publishing our A-share Outlook Report on Jan. 17 (China
Portfolio Strategy: A-share outlook: growth amid challenges) we have had extensive discussions with domestic and overseas investors. Now we update and reiterate our views in the context of recent developments.
Market uncertainty is now undoubtedly lower than before the recent third round of property tightening. We believe the overhang relating to the specifics of these property tightening policies has now largely dissipated, although we expect consumer price risk to continue to limit substantial near-term upside. Meanwhile, we expect the tightening policies will also help to ease inflation pressure in 2H11. The CSI300 rebounded for two
consecutive days after the policy announcement, indicating positive market reaction to the changes.
Maintain end-Q1 CSI300 target of 3,200 & sector preferences
The announcement of property tightening has partly alleviated market uncertainties. High short-term interest rates, which have caused widespread market liquidity concerns in the past several weeks, are likely to fall after the Chinese New Year. Together with positive annual reports, we expect a volatile but upward market trend for the rest of Q1. We reiterate our end-of-Q1 target of 3,200 end-Q2 index target of 3,500 and year end target of 4,000 and we continue to favor auto & parts, retailers, capital goods, container shipping, materials.
Our views on several frequently asked questions
In the past few weeks, we have had dialog with investors in Beijing, Shanghai and Hong Kong. In this report, we outline our views on several important areas of investor concern: 1) How to assess the impact of current tight liquidity; 2) Why we prefer auto & parts; 3) How to determine the impact of online shopping on retailers 4) What constitutes a good entry point for small/mid-cap growth stocks 5) Whether FAI-related sectors will
be impacted by a possible slowdown in property investment.
Great idea!
FMCN, AMCN, and VISN would definitely be the first choices for this outreach.
deleted, misread your post! Can't see how Reg SHO doesn't bump us higher
Mea Culpa regarding the hit piece, my crow tastes very good tyvm.
Seems to be pretty weak arguments, though
"Sixth, just happens to coincide with the obituary notice for the longs on or about day 13 and beyond. "
All good points, but I think you meant obit for the shorts.
It's not that the analyst is lying, it's that the shorts are trying to stop the analyst's clients from buying.
Whether or not any hit piece comes out, the short has effectively stopped buying pressure from the analyst's clients by telling the analyst, "Hey buddy, I've got a report coming out soon, you better tell your clients to watch out" ... there were similar rumors floating around in September when the stock was at $8 ... and no report came out.
Think about it, if the shorts had hard evidence against CCME, why wait until now to release it after already going through a squeeze from 8-20?
Why tell analysts ahead of time that a piece is coming out at all if they do, in fact, have the goods? makes no sense until you see it as a tactic to buy time.
CCME - Never understood why people would take these threats seriously.
a) If they really had the goods, why were they never tabled long ago?
b) Why tell the analyst who covers the stock that you have a hit piece coming up in a few days? Why give up the surprise factor?
IMO, they make these threats so the analyst tells their clients to wait until post-hit piece, thereby buying the shorts more time ... the hit piece never has to come out.
Marty,
Thank you for sharing your model, sir! Brilliant work and very easy to follow your assumptions/calculations through the individual cell links. FWIW, I am an American who lives in China and would be very interested in getting involved in the retail investor platform idea you hatched a few posts back.
Thanks again for the great work
NEP - I think you meant 18MM tons, or 135MM barrels
The remaining 18 million barrels presumably is probable (P50) or unproven reserves which brings in a host of assumptions including the price of oil and infrastructure needs.
The only reason I can see for them wanting to put some hit piece out now would be to try and interfere with the audit currently going on. They must know that they are royally screwed once another DTT audited 10K gets filed.
Doh, someone's obviously never been to Lamma Island in Hong Kong. =)
http://www.flickr.com/photos/cogdog/2892254702
Perfect, just in time for the new year. =)
That's an odd piece, because Timothy Moe's last published research from Jan 17th is the following:
"China Portfolio Strategy
A-share outlook: growth
amid challenges
Launching A share strategy. 2011 outlook: growth amid challenges
Our forecast is for the CSI300 to reach 4,000 by end-2011 (28% upside from end-2010 levels), mainly driven by earnings growth. More frequent policy adjustments and large/small cap style rotations are among the major challenges in investing A shares in 2011E. We expect the market to trend up, but with high volatility.
Upside remains for growth but policy concerns cap valuation
We forecast CSI300 earnings growth of 18% 2011E, driven by 15.6% topline growth and a slight expansion in margin, unexceptional based on historical levels. Our GS/GH bottom up earnings growth estimate is 2.6ppt lower than WIND consensus and 5ppt lower than our top-down earnings model. We are less optimistic on valuation expansion as frequent policy changes may cap substantial re-rating.
Liquidity supportive, and better than in 2010
Despite the widely anticipated slowdown in money supply in 2011, we think other factors, like the mid-long term trend of Chinese households’ shifting towards riskier financial asset allocation, should continue to support A share market liquidity. This trend may be accelerated amid higher inflation, and thus more negative real interest rates over 2011E.
Equity financing, shares unlocking among other indicators all point to better liquidity conditions than in 2010.
Structurally aggressive; favor consumer, industrials, materials
We prefer sectors more exposed to stronger global growth and less
influenced by unfavorable domestic policy to start this year. Specifically we like retail, autos & parts, coal, building materials, capital goods, container shipping and see utilities, oil & petrochemicals, telecoms as least attractive."
CCME - stock loan rate is back up to 22% at IB with no shares available. eom
and bend over!
Wow, loads of great estimates on this board for Q4 and 2011, but I wish people would start keeping their net income estimates separate from their FD share count estimates (ie - don't estimate EPS).
We all know that next year the FD share count will be topping out around 54M shares as long as all targets are hit. I'm of the opinion that what quarter they will start to be recognized in is not of primary concern. Sure it's interesting to see how the numbers change when we shuffle those shares around, but I think longer term investors (ie - the ones who will carry CCME to a proper valuation) are going to be keeping the final amount of shares (54M) foremost in their minds. Figuring out the absolute net income numbers and estimating the levers which will affect their growth is a more valuable exercise, imo. The discussion on FD share count numbers (and, by extension, EPS) should be kept separate.
CVVT - selling puts at the moment. I like taking advantage of the implied vol spikes after hit pieces come out and the downside afterward is usually limited unless we see a RINO repeat.
CVVT - Piper note out this morning:
"CVVT shares fell 20% yesterday after a publicly available "short
report" on the website http://citronresearch.com leveled a number of
accusations at the company, effectively implying that CVVT's managers
have been over-paying for acquisitions and lining their own pockets
with shareholders' cash (among other things). Make no mistake: CVVT
has a long way to go before it can be considered a well-run public
company. However, after visiting one of the company's acquired
facilities last week and speaking with management today, we believe
there is a level-headed explanation for each of the issues raised by
the report. We are reiterating our OW rating. Our $13 price target is
based on 8x our 2011E EPS estimate of $1.63."
Wondering if people who ask competitors about CCME are asking about 'China MediaExpress', 'Fujian Fenzhong' or 'Zhongguo Gaosu Pindao', the latter of which is their heavily marketed (and therefore probably much more recognized) network brand name - translating as 'China High-Speed Channel'.
You probably need a prime broker with few scruples and a hefty AUM.
It's called a forced buy-in, one of the big risks in shorting stocks. Obviously, the risk of this is higher for 'hard-to-borrow' names.
http://en.wikipedia.org/wiki/Short_%28finance%29
At any time, the lender may call for the return of his shares e.g. because he wants to sell them. The borrower must buy shares on the market and return them to the lender (or he must borrow the shares from elsewhere). When the broker completes this transaction automatically, it is called a 'buy-in'.
I meant long or short
Do you have an open position in LPH now?
Although, in fairness, you should add that that may occur after said people have made even more money
LIWA - Video from last week on CNBC that I previously missed, but there was a nice mention for the company towards the end:
http://www.cnbc.com/id/15840232/?video=1651564235&play=1
CCME
"Even better, they could have bought the shares from Ou Wen Lin directly at a price below market--i.e., give the sweet deal to shareholders rather than to Starr (who already got a sweet deal with the first offering). "
Would letting someone seen as being more of an insider than Starr out of his shares at a below market price really have been the best transaction for the company that was looking to build credibility at the time? I'm not arguing this from a corporate finance perspective, just from a corporate image perspective.
... Not to mention the fact that at the time Starr might actually have wanted first dibs on those shares.
Apologies for not keeping this board updated.
Q3 was definitely solid and the capacity build out for next year seems well on track. Looking for this baby to hit > $2FD eps next year. With their cash generation and earnings rates I would be surprised if this does not get to $20 within the next 12 months.
NEP - I currently don't have a long or short position in the stock, but I was also in from the CNEH days and sold on the run up earlier this year. I agree that the stock seems quite cheap at these levels, but I am concerned about current/future production as well as the increase in PTR's take that begins in 2012. At this point, it seems like they had better be drilling quite a bit to stay ahead of their production declines or be getting a new lease. I'd feel better about getting back in if we had some new news regarding both of those points. At least the drilling business seems to be firing on all cylinders.
When Jacky mentioned the planning for the 2011 budget and the inclusion of a dividend, he also mentioned that there would be updates regarding this issue before the end of this year, iirc.
I agree, it looks like it was a hedge.
Only 6k shares available to short at IB ... are we heading for "The Big Squeeze, Part Deux"?
CCME - Someone might also want to point out to Bronte that he also clearly got his fact wrong. Kind of important when he lists it as one of "only two negatives that stood out".
From Bronte:
"the CFO was under 30 years of age, operated from a serviced office in Hong Kong and his only qualifications were a degree from a distinctly second tier Australian university"
From TMI Proxy Vote Doc:
http://www.sec.gov/Archives/edgar/data/1399067/000095012309048061/y78076dmdefm14a.htm
pg 179 "Jacky Wai Kei Lam has served as Chief Financial Officer since May 2009. He is experienced in public company accounting and is primarily in charge of CME’s finance and accounting related matters. Prior to joining CME, he spent over eight years at PricewaterhouseCoopers Hong Kong and was most recently a senior manager. He also served as an accounting supervisor in a multinational company and was employed by a local audit firm before joining PricewaterhouseCoopers Hong Kong. He received his bachelor degree of business administration in accounting from Hong Kong University of Science and Technology in 1996 and a masters degree in financial engineering from the City University of Hong Kong in 2004. "
also pg 177 shows Jackie's age as being 35 at the time of the proxy.
Anyway, when Bronte F^%Ks up such easily checked information it's difficult to put much weight into any facts that he states.
A rate hike will certainly come, but I think the market was interpreting imminent action on rates as a sign of fear from the government since raising rate is something the government is extremely loath to do given the effect it could have on hot money inflows. A hike this weekend would have sent the message "inflation is out of control and we have to do EVERYTHING possible to get in front of it, hot money coming in or not".
A hike before the end of the year is something the market can certainly handle, though, as well as 2-3 more possible hikes next year along with adjustments to the RRR and further downward adjustments to loan window guidance, imo.