is...hopefully making money
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There is an epic battle going on at the 50 day MA. Shorts are in a fight for their life again, so I have little doubt that there is naked shorting going on in an effort to close it below the 50 day MA. The last time this happened in early October there was a 5 day tug-of-war at the 50 day as CCME tried to break loose, and it did, going parabolic. I believe the same thing is going on now. Shorts may keep a lid on it today and they may not...we still have 2 hours of trading left. They are going to get their asses handed to them over the next 72 hours though IMO.
There's a lot more percentage gain (and much easier gains) to come from letting CCME run 100-150% from here rather than keep mugging it for 3% to 5% gains
That's not necessarily true. There is a fortune to be made in manipulation if you have a lot of firepower and have a stock that is still susceptible to manipulation. Over time CCME is going to continue to build up institutional ownership as it becomes more well known and it will continue to set new, higher floors. Eventually it will stabilize and the manipulators will have to give back a lot of their gains, or even go negative, depending on how much skin they have in the game when things turn against them. The moment that the stock tips out of their favor and they lose control could be any time, perhaps even in coming days. They can’t cheat the laws of supply and demand, that much I do know.
5 million(ish) shares is a hell of a lot of shares to be covered. That is considerably more than the last squeeze we experienced. It would take weeks of 1-2 million volume days to provide coverage for them, unless the squeeze was very violent in which we could expereince some multi-million volume days with several dollars per share jumps.
Me too, and I feel like that could be a very conservative estimate as we don't yet know the potential from SWITOW and what other possible uses they find for their $200 million + in 2011. I don't like to bet on wild cards though, so I am using $3.50 as my target until the story unfolds some more.
I'm really looking forward to the first dividend distribution as well!
I wasn't counting the 3 million warrants, so that would be 47.4 million FD - so that would be $3.16 a share, but like you said the weighted average FDS will come in lower than that.
Is it just me or does it feel like CCME is finally going mainstream? The number of articles across many different venues seems to be burgeoning, and they are all saying the same thing - this is a huge value play with a unjustified short interest.
I can't be sure but I am pretty sure I have heard that somewhere else before :)
Agree. When I consider that the primary argument that the shorts fall back on is the impending EPS dilution, I can't help but wear a huge shit eating grin. Even if you factor preferred share conversion and the 7 million share earn out for 2010, FDS will be about 44 million. I am anticipating FY11 $150 million net income with a few wildcards (acquisition, above anticipated returns for SWITOW, significant airport bus contracts) that could far exceed that projection. Even if they just hit the $150 mark they would still garner FD EPS of $3.40.
The shorts are on the wrong side this. At 18x 2011 FD EPS, PPS would be $61.36.
I did my part on Monday when it dipped down to $16.20 intra-day. I picked up another 250 shares for good measure.
Can anyone define "experience stores" for me? Is that like a digital virtual storefront?
http://www.fool.com/investing/general/2011/01/03/amass-your-fortune-with-these-top-stocks.aspx
a growing consensus....
Incredible growth, brand-new dividend, short squeeze candidate, tremendously undervalued because of investors misplaced fears about Chinese corporations. This thing seems like the real deal and the closest thing to a no-brainer I've seen in my short investing career.
Another article that puts CCME with the appropriate peers and highlights the opportunity for an impending massive short squeeze. God help the shorts if we get analyst coverage in the near future. They might want to go ahead and start rummaging through their basements to see which cardboard box provides the most suitable living accommodations.
http://www.fool.com/investing/general/2011/01/03/do-the-shorts-know-something-you-dont.aspx
That is because what is most likely occurring are large scale acts of reciprocity. There is no definitive answer that anyone on this board can provide because we are not at the head table calling the shots (well if anyone here is please PM me :)). The MMs could be manipulating it, large shorting hedge funds could be manipulating it, large institutions that want to hold it back while they slowly accumulate could be manipulating it - we just don't know and probably never will.
What I do have a high degree of confidence in is that over time the buyers will continue to overwhelm this stock at the right price points and preclude the ability for the manipulators to maintain control. I happen to think we are in the early phases of another ritualistic cleansing of the pool.
Got my bid out...gonna try to load up on a few hundred more shares pre-market Monday, just for good measure.
Welcome Bullmarkets, glad to have you aboard. There have been many comments regarding concerns about the website voiced here. The recent site overhaul was a very welcomed update and I think there is still some room for additional improvements, but they are showing clear progress. I think we will continue to see improvements on the .tv site, the SWITOW e-commerce site and the general communications from the company over time. I concur with you that the degree to which they implement investment communication platforms that provide more clarity as well as a Western flare, we will see an equal, positive reflection in the share price.
I have confidence that they will get there in time. Again, welcome!
True, but strategic alignment is one thing and going and buying a competitors stock under the radar is a whole other thing entirely. How would FMCN shareholders react to finding out them buying 15% of a competitor in the open market without any agreements to ensure cooperative competition? They would flee in mass and many of them would land at CCME's doorstep. There is a reason these deals are done overtly, and there is a reason that good companies charge a premium and poor companies charge market value.
Before this share acquisition, VISN was down about 70% from its January high, is bleeding money and is sputtering at best. CCME is a rising star with over 100% YOY growth, a massive cash position and a very promising new service channel. We're not talking apples to apples here.
FMCN was clearly looking to hit the bargin bin. CCME will not be found in any bargin bins.
They can't afford a stake in CCME. If you were Jacky, what would you charge for a 15% stake of CCME? I would want a peer multiple, say 20x earnings or $50 a share for such a large stake - so what is that - $300 million? :)
Today's trading should tell you a lot. Shorts simply cannot move it lower than $15.70 despite their best efforts. They are clearly realizing this and backing off. Shermdog might be spot on that there is a major hedge fund that is just trying to keep a lid on it so they can bonus out and then jump ship starting next week. They clearly are not equal to the task of taking CCME down any further.
Yep, it's a whole new ballgame now. You should be setting your sights on FMCN's PE ratio, because that is where CCME is heading in 2011 IMO
Tiesto, why do you feel that the market should tank? Historically speaking, valuations are very fair across the board, companies are increasing revenues and US companies have more cash on hand than they have in recent history.
Granted, there are some looming negatives such as housing and unemployment, which are going to take a lot of time to mend, but the markets have adjusted to this new bad housing and stubborn unemployment market era IMO.
I've seen the inflation arguments go both ways, one indicating that the increase in per capita productivity has absorbed a lot of the short term inflationary pressure, but I still anticipate that being a pretty significant factor starting sometime in 2012.
Dan - per your PM - I definitely do realize that! :)
I don't necessarily see an ugly January for US stocks, but I do think that we will some curtailment and we will see institutions coming off of a very good 2010 with a more pre-recessionary risk appetite, which would have them hunting for more international value plays.
That is a very possible scenario for who is doing the shorting. There is one other macro trend that I think could be profound for 2011 as well. A lot of people have been scratching their head at the macro CGS valuations, and I think one possible explanation is that US small and mid caps just had a year to remember. My 401(k) US small cap and mid cap funds all had 20-28% returns. I think it is safe to assume that many institutions are going to keep their money close to home, where there is a lower perceived risk, especially when US stocks are on fire.
Think about how much people were making on Apple, NetFlix and Amazon. With household names providing lucrative returns, why would fund managers move money to China?
I think that once the US stocks start showing signs of losing steam, we are going to see a large influx of capital that is seeking better risk/reward opportunities in CGS. In fact, I think that time is fast approaching.
There is no lack of buying. There are probably ~5.5 million shares short right now. The recent buying has been huge, but was insufficient to allow appreciation during the onslaught of shorting. The fact that there are that many shares short but the price has held almost $1 above the old 52 week high should tell you something. If it doesn't then you are seeing something that I am not or your frustrations are impairing your better judgment :)
The next wave of buying will find the shorts out of ammo and with no option but to cover. That will create a cascade effect and will propel the price to a level that will probably align better with your expectations.
I hear what you are saying, I've been in the frustrated CCME shareholder seat before. What I am trying to say is that after you have done all of your DD and feel confident that you have chosen a company that passes your own litmus test, you are only left with what your gut tells you about impending short term and long term PPS movement. My gut tells me that by the end of January we will be whistling Dixie.
If you ask my why my response will be that I believe there is massive manipulation going on, on several different levels. Shorts are trying to manipulate the stock down so that they can cover low and make money both directions. Meanwhile we had a recent wave of excess liquidity from a big seller and Intuitions were sucking up shares and providing more support than the shorts had expected. We'll have a larger float, much larger short interest and much larger institutional ownership than we have ever had before, and when this puppy sparks it is going to ignite an explosion of epic proportions. Furthermore, I don't expect a significant and extended period of consolidation this next time around, for all the reasons that I pointed out in my previous post.
Please note that this is all just what my gut is telling me, but I've often found that following my gut usually serves me well.
That's what we all said at $8 before the explosion to $22 and subsequent retrace to $15's. The next wave of reconciliation is fast approaching; hopefully you can see that all of the pieces are coming together. IMO the next round is likely to be much more rewarding and sustainable as CCME is clearly now in a league of their own. A distinguished, appropriately audited and vetted, rapidly growing, cash heavy, shareholder friendly Chinese small cap growth stock. They broke all of the old "rules," setting a new standard for CGS equities, and everyone early to the table will reap major rewards over the next few years.
Indeed I do. Investors are going to get back in the game full speed next week, especially considering it will be the start of a new quarter and new tax year. They are going to have a lot of CCME news to digest and, IMO, that could trigger some heavy buying.
I think institutions are going to get settled back in after the holidays and we'll see new wave of buying come Monday. That plus the fact that the big seller seems to be dwindling down which is going to create upward PPS pressure with any new buyers. Shorts are also looking very over-extended. You have to remember that even though there are extra shares to be shorted now, that does not necessarily mean that they have endless money supply to continue shorting. It looks like they may have come close to hitting critical mass. Otherwise they could have drove the price down much more on a low volume day like today.
Volume is drying up, I think we see a major turn starting Monday.
Sure, my estimate is very conservative and it does factor in the dividend payments, funding for new initiatives, acquiring a lot of new contracts, especially a lot more airport bus contracts, and possibly some shares bought back (though that one carries a low probability IMO) and even with all of that $250m is conservative. I definitely don't think $300m plus is a stretch.
Either way illustrates the point that they have extraordinary purchasing power now and are going to have colossal purchasing power in 2011.
That time will most likely come when the short sellers run out of shares and after they go naked for a while like last time. I agree that the next stop is likely to hit the high 20's to low 30's. We'll see how Q4 comes turns out, but I suspect that will only put CCME at a pultry 10x TTM earnings - and thus still plenty of room to move higher over time. Especially when you consider that their revs are still growing handily and now are looking even more opportune than ever with skymall, airport bus growth and a let's not forget about the moat that they still have.
An acquisition of epic proportions could still be on the table for 2011. And if that doesn't happen they will likely wrap up 2011 with somewhere in the ballpark of over $250 million in cash. That would be $6.25ish per FDS.
There is probably a big seller dumping shares into the positive news. That would explain the continuous short shares available and how we have record short numbers without making the reg/sho list. All fine by me. It only delays the inevitable rise and creates a coiling effect as the shorts pile on like drunken monkeys.
Yeah, I watched that go through. Shorts must be getting very nervous at the seemingly endless support that we have in the mid-high $15s. They are throwing the kitchen sink at it but the bottom dwellers are soaking it up with ease. There is really only one way this can end for them...
I thought it was interesting to find that MarketEdge, which is a TA trading report that is provided for free to TD Ameritrade customers, has downgraded CCME to avoid for the following key reasons:
Moving Average Convergence/Divergence (MACD) indicates a Bearish Trend.
Chart pattern indicates a Weak Downward Trend.
Relative Strength is Bearish.
Up/Down volume pattern indicates that the stock is under Distribution.
If the shorts/quants are making their decisions solely on TA and their ability to continue to manipulate, they may continue to be successful for the short term. I just hope they are getting comfortable and nestled in - it will make it that much sweeter when big buyers force the squeeze and hit the eject button.
RAISE RATES that is the hidden gem in all of this. Not only do they now have a new revenue stream but this gives them crystal clear leverage to raise rates on existing services - which can have a profound short and long term impact on revenues and margin maintenance.
And don't forget that they just recently added over 2k busses to the network. Q1 2011 is going to be huge. Simply huge.
The contracted advertisers will provide the “lowest price guarantee” for all the items sold on the SWITOW platform. Moreover, some items sold through SWITOW will offer a longer warranty period than the traditional sales platform.
That is brilliant. They clearly thought through the value proposition for customers to help ensure a high degree of consumer traction. I am also very pleased with the impressive list of companies that they have already have signed. I was particularly glad to see Apple's name on the list. While you are riding, indulge yourself with a new iPad and we'll guarantee the price and throw in an extended warranty. Amazing!
For those out there that are convinced that the shorts have some ace up their sleeve, let me spare you the suspense...they don't. If they did they would have broken it out while they were running backwards through a corn field with their pants down.
They are short for the same reasons that we are long, because they feel that is the best way to make money. Maybe they are crossing their fingers hoping that CCME is the next RINO, maybe they are looking into their crystal ball and see more global short catalysts (Euro debt, global consumption, China inflation, etc, etc) and feel that the odds are in their favor, not ours.
Point is, it is as foolish to assume that they know something we don't and are holding it for just the right moment...and that the moment would come after they just lost tens of millions of dollars.
It is rare in life that you actually make money while being taught a lesson, but that is what happened to all of us longs that were freaking out the last time this happened and then watched our position double shortly thereafter. This time I think I'll just take the double without all of the worry.
The new short numbers should be no surprise at all. Several here, myself included, have been predicting record short interest based upon the trading patterns. The shorts are not discrete. With their signature 100 share taps they might as well been screaming "I'm back" from the top of a mountain. Well I say they and I'm not so sure that there is a they, it may primarily be a deep pocket quant or hedge fund.
This is great news IMO. Time for another epic roast, but this one will be bigger, better and longer than the last.
Let the good times roll.
Yes, you are correct. My count does include the airport busses.
The last count that I saw was 26,400