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CCME, key to rebuttal is number of buses
CCME needs to release a detailed list of bus operators and the number of buses at each - this shouldn't be too hard to do. The rest of the MW report is hearsay.
I remain convinced that all the revenue and profit is real. I don't believe for a second that neither DT nor Starr would have missed CCME's founder depositing $100M of cash into the companies bank accounts over the past year - and carrying out an unimaginably complicated fraud to make it appear that all that revenue came from disparate, phantom advertisers.
And putting aside disbelief for a second, what would have been the upside to the Founder of carrying out this massive fraud (involving fronting $100M of cash to the company)?? Earning yet more Shares (!) (not cash) that would hopefully be sold to new buyers years in the future, after how many more audits?
CCME, key to rebuttal is number of buses
CCME needs to release a detailed list of bus operators and the number of buses at each - this shouldn't be too hard to do. The rest of the MW report is hearsay.
I remain convinced that all the revenue and profit is real. I don't believe for a second that neither DT nor Starr would have missed CCME's founder depositing $100M of cash into the companies bank accounts over the past year - and carrying out an unimaginably complicated fraud to make it appear that all that revenue came from disparate, phantom advertisers.
And putting aside disbelief for a second, what would have been the upside to the Founder of carrying out this massive fraud (involving fronting $100M of cash to the company)?? Earning yet more Shares (!) (not cash) that would hopefully be sold to new buyers years in the future, after how many more audits?
selling puts like a gangsta
wheelbarrows full
YEE-HAA!!
Agree. Great job on CCME Michael
After reading that article, I decided I had to buy CCME
But wait, shit, I already have a ton of it!
ccme: shorts won another battle today
i'm highly confident though that they'll lose the war, and it won't be long now.
in the next two months, loads of CGS will release q4 earnings, 2011 guidance, and audited 10Ks.
i believe that the vast majority of the bigger ones (over $100M in mkt cap) will get their 10Ks out without mishap, and virtually all who had a top-10 or better auditor last year.
while this is happening, i expect plenty more hit pieces, of progressively lower quality.
maybe the CGS space grinds a bit lower, or maybe it grinds up.
but sooner rather than later the momentum is going to turn against the shorts, and then the move up will be explosive. every company with a decent auditor and decent 2011 guidance is going to take off, much, much higher than last fall
ccme price tomorrow depends on jackie, Northland, GH
as in, when do the three of them respond
northland named ccme their #1 pick and citron most likely butchered the analyst's words.
GH has done as much or more DD on CCME as on any other name.
i am certain jackie, starr etc knew this was coming and have a strategy ready
i sold enough at the money june puts today to buy a decent condo... i will sell more if the stock keeps falling, which i think it will until we get responses from the above. this could happen before bell, but maybe not. after they start to respond it is going to bounce HARD
good job to the shorts giving themselves a chance to cover
but andrew left of citron - i hope you got paid well for this. it just may come back to bite you
ccme, citron's part 2
my guess is they *claim* - with no evidence whatsoever - that deloitte won't sign off on their 2010 audit
they made a similar claim with cvvt - that they would have a problem with their 2010 audit
neither citron nor other shorts have anything real to say about ccme
CCME selling puts...
march 19s at 5.2
march 20s at 6
march 21s at 6.7
i think the hilarious hit piece was paid for by the shorts that were in deep.
citron got enough $$ that they were willing to sell a lot of their future credibility (which was on the wane anyway).
smart shorts are using the volume in the last few days (when the hit piece was pre-released) and today to cover their positions.
i am willing to bet that we will finally see the short interest significantly down next period.
price action (fact that stock didn't really get hurt) incredibly interesting.
i like selling these "at-the-money" puts for huge premiums. kind of weird that people are buying them *after* the hit piece out and stock flat.
then again, volume is tiny (i am most of it)
CCME very important days for CGS vs shorts
If CCME closes above 20 today or tomorrow, the shorts are going to get absolutely murdered. CCME will fire higher due to short squeeze.
Short credibility will be ruined.
New favorite game of long hedge funds --- find the CGS with high short interests and squeeze baby squeeze.
Meanwhile, hit piece is 30 minutes old and the stock is flat from when it was released...
shorts may soon get run over
i am looking at ccme, hrbn and tstc as bellweathers
when ccme and hrbn are above 20, and tstc is back above 10, i am going to shed a tear myself for the shorts
ccme has been massively shorted because their margins were "too good to be true"
hrbn because its auditor "can't be trusted"
tstc because its A/R and DSOs are "too big to believe"
in other words, "THEY'RE ALL FRAUDS!! SELL!! SELL!!"
when these stocks hit those price points, both retail investors and long institutions are going to really start losing their fear that these "smart" short hedge funds know what they're talking about. plus, more trader types are going to buy their attacks more aggressively.
it's not going to be a slow melt up when this shift happens. it's going to be disorderly and a lot of fun
anybody who thinks he can predict market ST...
how many very successful investors (mulit-multi-millionaires by definition) do you think believe that they can predict the market short-term?
answer: pretty much none of them.
lots of full-of-shit journalists, commentators, newsletter writers etc pretend that they have this talent, but that's just because they're selling words. none of them are successful investors and none of them are putting their portfolios where their mouths are, buying index calls and puts.
i'm not saying it isn't fun to form ST predictions, but it's worth remembering that you're just guessing
TSTC - stock will be 15 in 3 months
Short attack had no content. Everybody has always known that this is a high a/r, high dso business. So is their much larger hk listed competitor comba telecom. the stock got hurt from short attack because it is all retail holders and only roth covering them. meanwhile, even with that less than inspiring conf call, stock is only down about 15% from the attack.
The key catalyst going forward is that in next few months they collect all the money from the big 3 that they booked in 4Q 2009. cash balance goes way up. A/R goes down. Investors are re-assured that the revenue is real. They see huge EPS guidance for 2011, and the stock moves up to a 5X p/e on 2011 earnings, which will be at least $15.
Whole thing may repeat next year.
Only way they break this cycle and hold onto a P/E of 5+ (hell it could even go to 7!) is if they start to drawing on their LOC, which will show investors: (a) the A/R is real as a bank will loan against it, and (b) they can grow another 40% or so (to NI of $44M) without need for more equity sales.
ZSTN bet - that would be a domestic beer
zstn, i'll bet a beer it sees 7 before 4.5
zstn, not defending the company, but...
having the s3 out there is different than doing a capital raise
these guys *could* have thought that after announcing their Q4 and guidance for 2011 that the stock could run to 10-15 (it ran to 10 last year on much lower numbers) -- and better to have the s3 out there just in case.
low p/e and s3 don't by themselves prove scam. personally, i doubt it's a "scam" for various reasons. it probably has mediocre business model, or lots of risk about earnings sustainability two years out. i also think it's a good little speculation at today's price.
nep - has anyone done back of envelope on eps for next couple of years?
jgbo bspm wkbt ltusd nuin cski ugly contest
really amazing how "cheap" these stocks are
either rampant with fraud (defined loosely), or maybe single best sector returns over next 12 months
jgbo - the cheapest by far. trades way less than cash. earnings actually starting to grow. has resolved legal cloud from notes holders. i can't resist owning some of this on hope that mgmt isn't criminal.
bspm - in my opinion the least hairy. what people don't like is that they are concentrated in one product. i take comfort in thinking that *that* is the problem. also, the fact that chairman accompanied Hu to US is further indication that company is real.
wkbt - great growth. inexplicable capital raise. that said, i'll probably buy 100k shares in said raise...
ltusd - uplisting coming, and mgmt seems to want to promote the stock. but drag from old land issue. i think nice speculation. i sold most earlier and like it at $2.
nuin - another insanely cheap one with great growth -- but it's "golden grass". i own a bit here too.
cski - never owned this one. i really don't need any more of this ugliness, but i probably won't be able to resist adding to the hairy harem after a bit of research
OSN, Global Hunter better hope findings are positive
This was their first IPO in the China space. They are betting their credibility that this company is 100% legit and that the stock will be materially higher a year from now.
NEP, buying first shares today
News certainly reduces risk that mgmt had interests contrary to shareholders
Also, sellers who received all that restricted stock must have been given reason to believe that the stock price would go up.
However, I believe that there were probably a lot of shareholders who believed in this stock too early and too big and who have been waiting for some kind of good news to sell, lighten (somebody on this board described himself this way), so it's not clear exactly where the stock will settle.
Anyway, i am buying some NEP so i can better enjoy all the POS jokes and postings
like a champ, or as joenat would say
taking it like a $10 hooker
it's hairy as hell out there, but it's fun
"CGS Negativity - I have to say, with all the recent negativity from the media directed squarely against Chinese RTO's (see yesterday's reuters article "Worthless Stocks from China", this space is really taking it like a champ."
cvvt, could be a long slog
i've bought on the small side
pr was excellent
but the stock didn't go down all that much to begin with
now it is tainted
has huge institutional ownership (relatively)
not sure if this is what they thought they were in for, so could see continued selling for who knows how long
i do think company is legit and above avg among cgs fundamentally, so i think safe to hold onto
not sure about the near term call options
Only problem here is WKBT isn't liquid :)
$5M of PIPE buyers getting sell-able shares on the same day might not be pretty.
CVVT, more to fall methinks...
I believe TSTC fell harder and faster than CVVT, even though the hit piece on TSTC was much weaker, because CVVT had so much more analyst love and way higher institutional ownership than TSTC. The institutions didn't just panic and sell like the retail TSTC holders did. Rather, they all put calls into the 4 banks that cover CVVT and are waiting to hear what the analysts have to say.
I think that over today and probably at least tomorrow, the analysts are going to say "we're still reviewing it" and the stock will keep drifting lower.
As to how low it goes and when it bottoms, the key variable is whether any of the 4 analysts says something very negative. If even one suspends coverage or anything like that, that should shave another 15% or so. I think there is a good chance that at least one out of the 4 analysts does come out negatively.
All that said, while I don't own CVVT (I'm in VALV instead, which I consider much better company), all my tidbits of info tell me that CVVT IS NOT a RINO, not even close.
I would probably buy in size if one of the analysts comes out negatively, but I hear good things from other sources.
qxm, xing, fwiw...
i sold off xing on the first spike to 2.7 (too early), but kept my 2X larger position in qxm b/c the discount widened to 30-40%. i also felt like the higher that xing traded, the higher the chances that the qxm shareholders would quickly vote to approve the deal.
whenever xing had a big further spike, i sold off some qxm shares regardless of the discount
yesterday, today i sold off the rest b/c (1) the discount is the smallest it's been since rato first discussed the stocks, (2) i don't want to bet on xing going higher or even staying at this level, (3) if xing drops much from this level, then i see the risk returning that qxm shareholders don't approve the deal
qxm, xing - now just over 20% (was less than 20% earlier today)
yes, 1.9 shares plus .80
right this minute they're 5.10 and 2.83
so qxm gets 6.18 if deal goes through. so 1.08 discount, or about 21%.
HRBN, CCME, TSTC? short battleground
HRBN has 5.4M shares short
CCME 5.5M shares short
These are two of the biggest short positions in the chinese space. Shorts are getting killed in both names. Also, these two names are doing A LOT of damage to the notion of "the hedge fund shorts must know better" than the retail longs
Will be very interesting to see if TSTC gets back above 10 in the next week. This could also be VERY DAMAGING to the short side if it gets shown once again that the shorts had nothing, that the longs who sold after the hit were the losers and the longs who bought after the hit were the winners.
I think this board has a bias that there will be a lot more downside from new short attacks in the coming months. I sort of share that bias. But there is a chance that the tide is already turning.
I'm not saying it's going to happen, but if we see CCME and HRBN both over 20 next week and TSTC over 10 (10.60 even better as that's my avg price:), my bias is going to shift.
covered my losses from tstc ;)
some people here advocate picking a very small number of names that they are *certain* about
i prefer to lay a lot of bets. though not at all indiscriminately, and some much larger than others.
but no question you get burned sometimes with this approach
xing, qxm
no longer any reason to hold qxm
used to be 30-40% discount to xing price assuming acquisition went through
now less than 20%. not worth it
thx rato for that one
Shorts who cried wolf - can we crowdsource a list of all the short attacks?
I want to put together an analysis of what the average return has been from "buying the pain"
I may turn it into an SA article.
Questions are:
1. what constitutes a short attack? (certain blogs versus YMB, certain decline in price, etc)
2. how did the attack get distributed? which blog(s), etc
3. how much did stock decline, how quickly did it hit bottom, how much has it recovered
4. others?
Off the top of my head, here are the short attacks in CGS space:
CHBT
ONP
CEU
TSTC
ZSTN
CMFO (?)
UTA
RINO
FUQI (?)
GFRE
HRBN (?)
CGA
CSKI
what am i missing?
BSPM, WKBT
In fact I own BSPM now and I'm planning to buy some WKBT through the PIPE that is still being sold (at 2.40 per share of restricted stock, with warrants on top).
I consider BSPM much less hairy. Their product has been vetted. There is some indication that it works to some degree, esp considering the cost. I can't say that about WKBT. Also, BSPM has already had some scrutiny as a nasdaq stock; there's no short interest. WKBT has been tested this way at all.
Also, WKBT has no good reason for doing their current round of $1-$5M. They say it's for "marketing," but they already have $30M available for that. They say it's because they need to raise $7.7M total from foreign investors to satisfy their wofe license. But they have til something like 2027 to do that -- so why not at this P/E? In short, the round smells bad.
All that said, I still plan to buy some WKBT at the discounted price, but I consider BSPM a much higher quality company at this point.
BSPM, btw westerners buy alternative medicine too
again agree with throwerw
as income grows among chinese middle (and lower) classes, i would bet anything that total consumption of TCM grows too
of course consumption of western medicine will also grow, but this will not crowd out TCM. no possible way. esp inexpensive TCM
BSPM - I also think worthwhile and agree with throwerw's points
I have small-ish investments in a bunch of the TCM/health companies...
BSPM, TPI, JGBO, LTUS, WKBT
They all have insanely low P/Es
I think the reasons are:
1. western investors just don't like TCM companies (we're biased, we think that they're useless and that the chinese will eventually stop using TCM)
2. as a group, the companies are hairy
However, I think BSPM and TPI are way less hairy than the others.
And I think BSPM is too cheap given top 10 auditor and plans to upgrade to top 4.
Yes, these days, CGS FEELS GOOD
exactly how good do you feel?
groove armada
TSTC hit piece was WEAK
There was nothing new or substantial. All the stuff about Quell was a pure distraction. Like Bronte talking about UTA's website, only even less relevant.
Unfortunately I was already in the stock as a speculation on great 4Q and 2011 guidance :(
I liked the stock b/c I believed the heavy short interest was based simply on [chinese reverse merger] + [super high A/R].
I read comba telecom's filings (close competitor, trades in HK, like $1B mkt cap (can't remember)). Main takeaway is that they also state that the big 3 chinese telecom co's take like 1 year to pay, so their overall DSOs were 270 days. So I got over the high A/R issue.
As for the stock sale at $12 - it totally sucked b/c they had recently said they didn't need to raise capital. BUT, they probably did need the money to expand R&D facility, etc -- given that they do have all this A/R and that the LOC is only for working capital.
Bottom line, this is still a speculative stock, but I think it's probably a great speculation rather than a good speculation.
HRBN closing would be monster catalyst for CGS
particularly for larger, higher quality CGS
not too pleasant for the funds shorting the big names
good job raising distinctions, but too gloomy IMO
i believe it's more like
10% "fraud"
30% "bad investments due to crappy business model, management, risk factors, etc" -- given current prices
30% decent investments due to OK business models, management, risk factors, etc -- given current prices
30% great investments due to good business models, management, risk factors, etc -- given current prices
3 points:
1. this space is full of shades of gray; it's not black and white. there were a bunch of good recent posts painting that picture. rato, you do a good job arguing the bearish fear case, but it's calling gray black. if you're that sure, you should short zstn on monday, but i somehow doubt you will do that
2. the whole space is hairy. all of it. no exceptions. BUT THAT'S WHY IT'S CHEAP. if you don't like hair, you should find somewhere else to invest.
3. i don't think it's all that hard to figure out which stocks are mostly in the "decent" and "good" categories above, and i think buying a big basket of those stocks will be an awesome investment over the next 12-24 months
LTUS land is 2.5 hours from Beijing
Inner Mongolia is huge, but there is a piece of it very close to Beijing, which is where LTUS bought the land.
http://www.thefreelibrary.com/Lotus+Pharmaceuticals,+Inc.+Purchases+Land+Use+Rights+to+Grow+its...-a0193131593
About the Chahaer Industrial Park
Creation of the Chahaer Industrial Park was approved by the State Council in 2003 as an important means of assisting the under-developed western regions. It consists of 10.41 square kilometers of land located in the county of Chayouqian of Wulanchabu City in Inner Mongolia, around two hours and thirty minutes driving time from Beijing. A number of the Chinese government's preferential tax and operating subsidy policies automatically cover companies located in the park. About one third of the park is currently occupied. Information about Chahaer Industrial Park is available at: http://www.cyqq.gov.cn/ .
LTUS, let's be realistic...
Of course they're hairy as hell. That's why they have a P/E of 2.5!
IMO pretty much all these otc stocks with a P/E of 3 or less has just as much hair, it's just whether we know what color it is
That's why I say -- don't own large positions in the super super cheap stocks.
CNAM, crappy stock but very dangerous short
this stock has decent chance of running to 10 in next few months
news today was flimsy, but they have potential to announce contracts, to announce a utilization rate of the plant, to announce 2011 guidance (whether one believes it is another thing).
i think risk/return of shorting here is terrible.
now if it does run to 10 (or 15), risk/return of short looks much better