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Exactly, how can the company 'show the money' without relying on a third-party? If they show bank statements, how does anyone know they aren't fake? If they show a photo of piles of currency, that could be photoshopped or just a short-term loan for the photo day. In the end, the ONLY way to prove currency is to have a professional third-party source, with its own reputation and professional standing on the line, verify the cash by whatever means it determines appropriate.
This is why the short game of attacking Deloitte is so ridiculous, if we can't rely on auditors then the whole stock market is just a matter of one opinion against another (which would suit them fine since they are liars).
Dan, I'd bet that Citron was planning to launch their attack in conjunction with earnings, but things were about to get out of control so they rushed the article out. CCME had a perfect technical setup, the stock was on Regsho, and then Glen's article was the match in the gunpowder room. They were about to get fried.
So now they have split the article, probably keeping part 2 in reserve until earnings. Anything that can be done to discredit Citron in the meantime should be done, IMO.
The company chose to stick to the indisputable facts:
- Citron did not contact them
- Investors should look to SEC filings for the facts
- Earnings will be released on time
They are highlighting that the short game is to fumble around in the dark, so to speak, and try to verify the company's business without talking to the company. Obviously this puts the 'investigator' at an extreme disadvantage, but that's exactly what they want - a preordained difficulty in verifying the company. Compare that to Global Hunter, who just visited the company and reviewed the government contract and other documents.
They are also simply pointing to the filings and earnings - again, the most basic factual information about a company, and verified by a respected, professional third party. And they stated flatly the 2010 10k would be released on time.
It must be crazy for them to be in the middle of an intense audit with Deloitte, crossing all the t's and dotting the i's on an extensive financial/legal filing, and be asked to respond to some nutjob who is having trouble googling the company's name and sends their stock down 20% because of it.
Here's the NFA suspension for 'cheating, defrauding, or deceiving' a customer:
http://www.nfa.futures.org/basicnet/Case.aspx?entityid=0253075&case=95BCC00020&contrib=NFA
Here's the recent arrest info and mug shot:
http://florida.arrests.org/Arrests/Andrew_Left_5278017/
Here's the first page of a complaint against him from his former company for 'Fraud and Deceit':
http://www.skweezer.com/s.aspx/-/photos1~blogger~com/blogger/6051/3147/1600/Page1~1.jpg
These were all found by a poster on YMB (gil765gil), there must be more out there because the police arrested him for failure to appear on a theft charge (not the theft against his prior company in 2002, I presume).
It's up to you whether to post this on the board or not, as far as I'm concerned it should be part of Citron's website disclaimer and certainly should be of interest to the SEC.
Honestly, I think the hit piece was written because Andrew Left could not afford for his short position to go bust, as we all know the stock was breaking out of a cup formation on Thursday with record volume. He is obviously in a desperate position right now, he is facing potential fines and prison time, so he rushed out a hit piece to kill the momentum.
Andrew Left has committed securities fraud in the past and is currently wanted for theft. He was arrested just last month for failure to show on theft charges. It is very important to make it clear that the man accusing CCME of crimes is a 2-bit criminal that was about to lose his shirt when he published this hit piece.
Turns out Andrew Left has quite a criminal history (securities fraud, theft, etc.). Maybe it's time someone did a 'hit piece' on him (hint, hint).
He's got some new videos in the last hour or so - he's really doing a great job.
wctBills has new video of the Chengdu Shuangliu up, at http://ccme-info.xanga.com/.
Beat me to it, hundredwaters - yes, Mr. Left has had some problems with lying in the past. Here's the working link:
http://www.nfa.futures.org/basicnet/Case.aspx?entityid=0253075&case=95BCC00020&contrib=NFA
ANDREW LEFT -
THE PANEL FOUND THAT LEFT MADE FALSE AND MISLEADING STATEMENTS TO CHEAT, DEFRAUD OR DECEIVE A CUSTOMER IN VIOLATION OF NFA COMPLIANCE RULES 2-2(a) AND 2-29(a)(1). LEFT'S CONDUCT WAS INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE.
This argument is pitting indirect evidence (such as another company failing to mention CCME as a competitor) against direct evidence (Deloitte-audited financials, CTR-audited operations, videos of operations). This is the game the shorts play.
Yes, it's speculation on my part. I have emails out to Darren at Northland, we'll see if he responds.
That's what I thought at first, but it appears likely that Northland advised its clients to sell on Friday, having advance knowledge of the hit piece. Do you think they may have advised their clients to short CCME on Friday? That would explain the massive turnaround we saw.
I don't know if Northland planned the hit piece with Citron or not, but they clearly participated with Citron in achieving the shorts' goal of stopping the momentum and creating a sell-off.
That's one way to look at it. Another is that the short squeeze was underway (Thursday), and then Northland colluded with Citron to stop it. They apparently advised their clients to sell (and likely short) the stock en masse on Friday, after knowing in advance about the hit piece. That stopped the squeeze. Then Citron puts out its article today - along with a nice quote from Northland questioning the company's legitimacy.
Bunch of mobsters, hope the SEC gets involved.
therivetman - that's exactly the kind of nonsense that makes up a fluff article. The implication is that, because some article does NOT mention CCME, that means that CCME may not exist. That is voodoo logic. We have audited financial statements, Starr, the names of airports, the names of inter-city bus companies, and (for crying out loud) we have videos showing the CCME equipment in the field.
This is the short game - come up with ONE piece of weak circumstantial 'evidence' and publish it, ignoring a mountain of real, verifiable evidence on the other side of the equation. All arguments are not equal here, longs do not have to explain every bizarre tidbit thrown out there by some faceless short.
Seems that Northland got played, and then Citron screwed them again in the article. Northland really needs to respond after being used like that.
Man, you should relax about Fernando. Know your own stock.
Excellent day for longs - filled the gap AND got the long-awaited super-lame hit piece out of the way. It's hard to overstate the importance of this, the FEAR of a hit piece has been a major ceiling on the stock price. The Citron article will be viewed as 'the best the shorts can come up with' - I think this is a watershed moment for the stock.
Ha - the 'Citron Squeeze' - I like that, good title for an article. Any takers?
I do expect that Northland will rebut that particular charge - Darren pretty much has to respond.
IMO the company should ignore this, there isn't any real charge to respond to. It's just a fluff piece, nothing there.
Darren said it 'might' be a fraud? Almost any company 'might' be a fraud, that's super-weak and I'm sure it is out of context. This is the sign of a very weak short attack, when they are arguing that a company 'might' be a fraud - heck, that would cover just about every company on the planet.
THis is profoundly weak - excellent, nice to have it out of the way.
No surprise to see JoeNatural bashing away on Yahoo this a.m. with this new Citron rumor - guess he wants in cheap.
So John Bird, John Hempton and Seasaw walk into a bar to talk over CCME. Seasaw says "What a joke, ads on buses." Hempton says, "The numbers are too good to be true." Bird says, "All Chinese RTO's are run by criminals." They paid for their drinks and left the bar.
So how many of them are shorting CCME?
Not one of them.
Seasaw:
http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_(A_to_Z)/Stocks_C/threadview?bn=101061&tid=39522&mid=39633
John Hempton:
http://brontecapital.blogspot.com/2010/11/china-media-express-wall-street-drama.html
John Bird:
http://seekingalpha.com/user/74349/comment/1426851
Found this to be interesting... John Bird (aka Waldo Mushman), the figurehead of the Chinese RTO shorts, now acknowledges that he was short CCME, covered at a loss, and no longer holds a position.
http://seekingalpha.com/user/74349/comment/1426851
"I have about a dozen position in the RTO space. Some including CCME, and CHBT were losers. Most have been very kind to me. I am not in CCME anymore" ... Jan. 25, 2011
Lol, that's a heck of a gap.
Interesting conversation on the IBD forum re CCME, IBD50, and 'too good to be true'. I wonder what percentage of investors out there have looked at CCME and are still stuck on 'too good to be true'.
http://www.investors.com/forums/p/2931002/3317757.aspx?z
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CCME OR AFOP - WHY AREN'T THEY ON THE IBD50 LIST?
Great example why I don't like the new IBD50 - why isn't a stock like CCME on the list? It has a 99 overall, with a EPS 99 and RS 91. Trades 1.4+ million shares daily (50-day avg). What about AFOP which is 99,93,99 with 135,000 shares daily traded?
I am really wondering why they are cutting off great companies and rewarding them by putting them on the IBD50 list? Yes, I saw their little notice that "they are going to ignore thinner and more violitile stocks" but isn't the whole idea to get into those before they become bigger and fatter? Did people forget that AMZN went to $200 then fell to $8 and now back to $185?
If IBD is going to turn into a marketing machine for their peformance (rumors say they want to make it 50-top stocks so they can show a better performance) and not continue to look for great little companies (and get them noticed before they became bigger like they did before), I will cancel my subscription.
Funny thing is that both CCME and AFOP are listed in the IBD200 top co's, but not to have them in the IBD50 is a shame.
Too many folks are remaining silent on this. Speak up!
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RE: CCME OR AFOP - WHY AREN'T THEY ON THE IBD50 LIST?
I love the new IBD 50 list and the fact that they removed the more volatile pump and dump stocks. I think its one of the best changes IBD has made in quite some time. The stocks on the list now are almost all institutional quality and the list is quite incredible.
I agree CCME should be on the list but I don't think AFOP should be due to it being rediculously thin.
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RE: CCME OR AFOP - WHY AREN'T THEY ON THE IBD50 LIST?
I’m not sure I am getting your concern. If the rumor is “So the top 50 can show a better performance.” what is the harm in that? I agree that cutting the list will result in some little companies being overlooked. However, if the overall result yields a greater return, it would be in everyone’s best interest to put their money with the companies that are showing that greater return and save everyone some research time in the process. Just my “speaking up” others may disagree.
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RE: CCME
What does everyone here think? Pump and Dump stock or is this baby for real,All the numbers on IBD look great but they seem to good to be true.Seems to be forming a funky looking cup any thoughts?I'm a newbe at checking charts so any help would be highly appreciated. I seen this stock was being shorted to the hilt sure would be nice to catch a squeeze..
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RE: CCME
http://blogs.forbes.com/schifrin/2011/01/26/why-chinese-value-stocks-get-no-respect-on-wall-street/?partner=yahootix
Probably won't allay all fears, but this lends support to a "for real" argument...
the master
Put it to you this way... if you were an auditor, and the SEC and a Congressional committee told you in advance that they were going to scrutinize your audit work on this Chinese company, would you think 'eh, I'll just do a sloppy audit' or 'whatever, I'm going to collude with this company anyway'...?
That's the situation, as everyone knows that any China smallcap that claims $200 million in cash and a 70% profit margin this year is going to get the attention of both SEC and Congressional investigations. So IMO you can have a LOT of trust in the 10k that is coming in a few weeks (not that you shouldn't trust the last statements, for that matter).
I love the kneejerk suspicions of 'too good to be true', it has created an extraordinary opportunity here.
~6979~ - fantastic posts and TA, much appreciated.
IMO, his tactic is to try to force longs to prove a negative - that the company is NOT a fraud. So instead of the shorts being required to demonstrate ONE instance of fraud, they attempt to force longs to defend ALL aspects of the company. It's a framing device that imposes an impossible task on the other side. Their ultimate 'catch-22' argument is that no independent, authoritative source of information is itself reliable - basically suggesting, every individual investor must perform his or her own personal audit of the company.
The whole thing is completely twisted, also the reason it's so entertaining to watch it fall apart.
Glen, Birdman left a comment on a seekingalpha article that implied he did not have a position in in CCME, at least that's how I read it. He stated he had not 'researched' the company, after making generally skeptical statements (the usual uninformed stuff). This was about a month ago, I'll try to dig it up.
Majik, the inspiration came from newport, who apparently had his shares lent out the last time CCME went REGSHO. He waited for a week or so, and on an 'up' day he pulled all his shares back... and he has a lot of shares in his fund.
http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_(A_to_Z)/Stocks_C/threadview?bn=101061&tid=37542&mid=37568
Every little bit helps. ;)
fwiw, my Schwab broker approached me about lending shares from my cash accounts - both brokerage and retirement accounts. His answer to your question was that they cannot lend cash accounts of any kind without explicit permission.
After giving it some thought, I declined to lend them, as they were only offering 5% and it was going to get a little complicated with the dividend and taxes. Also couldn't really stomach giving the shorts any more ammo, but that emotion might have been offset if they had offered higher interest. ;) There is something to be said for the satisfaction of pulling the shares back at an exquisitely timed moment.
Very nice mention in IBD today:
Meanwhile, China MediaExpress Holdings (CCME) added 3% in strong turnover. The provider of digital advertising for buses in China is nearing a possible buy point of 22.40 from a cup base. The correction in this base was 36%, just a little deeper than the 35% or less that you would prefer to see. Like Grupo Financiero Galicia, the stock has lately been featured on IBD's International Leaders page. It sports a best-possible Composite Rating of 99. Funds owning shares have ballooned in recent quarters to 40 funds holding 6.3 million shares as of the September quarter, or 26% of the total float.
http://www.investors.com/NewsAndAnalysis/Article/560193/201101191333/US-Stocks-Hit-New-Lows-In-Mixed-Trade.htm
Good to hear confirmation that the SAIC issue will be taken care of - many thanks, Fernando.
This is funny/sad/weird - from a jobs website, someone trying to hire a photographer in Fuzhou to take photographs of CCME's headquarters and buses - for $10. Low budget short? Low budget long?
---------------------------------------------------
Pictures needed of China MediaExpress in Fuzhou, China
Fixed-Price - Est. Budget: $10.00 - Posted 23:50 (21 hours ago)
Apply to This Job
Post a Job of Your Own
Job Description
I will pay $1 per digital photograph (for a maximum of 10 photographs for $10) for pictures of China MediaExpress (www.ccme.tv).
Video of buses and video screens (http://www.ccme.tv/gb/video/ex-events.php?section=bus_visit)
Company Headquarters:
Headquarter
22/F Wuyi Building
33 Dongjie Street
Fuzhou
China
I need at least one of each photograph for you to receive payment:
-1 or 2 photographs of the exterior office building displaying the company logo
-1 or 2 photographs of the interior office entryway displaying the company logo
-Up to 6 photographs of television screens in buses displaying the company logo and advertisements.
Skills Required:
Digital Camera Needed, Located in or near Fazhou, China
http://www.odesk.com/jobs/Pictures-needed-China-MediaExpress-Fuzhou-China_~~cb2e29b77db2c804?tot=5000&pos=7
CCME sure is popping up all over the media these days, here's a small sample pulled from my gmail news alerts over the last week.
-----------------------------------------
Buses in China are a great place to invest
China MediaExpress (Nasdaq: CCME) hit our "10% pop" list for the sixth time this week, bringing this stock a step closer to catching Molycorp for the most single-day big moves since we started keeping track. The company signed more contracts and won the No. 1 spot on Forbes China's "Up-And Comers" list. Its stock has nearly doubled over the past year, yet it still sports a nice 8.5 price/earnings ratio -- extremely low for a company growing so rapidly.
When a stock hits our "popped" list more than once, it has a tendency to come back time and time again, and China MediaExpress is no different. I'm still a little cautious on Chinese stocks, which have a tendency to bring surprises when we least expect it, but momentum is on China MediaExpress's side. Bus advertising -- who knew?
http://www.fool.com/investing/general/2011/01/14/what-the-market-taught-me-this-week.aspx
Most Active Stocks with Volume at NASDAQ
http://www.savvystockpicks.com/stock-updates/2011017709-affx-ccme-incy-peix-fnsr-most-active-stocks-with-volume-at-nasdaq/
As far as stocks showing up in Kimmel's Magnet Stock Selection Process, we are seeing some outstanding under-the-radar companies making moves. ... China MediaExpress Holdings Inc. (CCME) moved over the technical “go level” on the point and figure charts...
http://www.minyanville.com/businessmarkets/articles/t3live-morning-call-stock-market-finance/1/13/2011/id/32156
What: Shares of China MediaExpress (Nasdaq: CCME) jumped again today after the company announced three new contracts. This time, the stock was up 10%.
So what: The contracts will add 774 express buses to the company's growing lineup of buses, now exceeding 2,200 intercity buses in Henan province. The largest contract, consisting of 623 intercity buses in Henan province, is a five-year agreement while the others are shorter-term agreements.
Now what: China MediaExpress has been on a tear lately hitting our popped list six times since the start of November. Strong earnings, a low price-to-earnings ratio, and continued network expansion should help drive shares higher into 2011. I'm not going to stand in the way of a great growth/momentum story and would stay long on the stock heading into earnings season.
http://www.fool.com/investing/general/2011/01/13/china-mediaexpress-holdings-shares-popped-what-you.aspx
China MediaExpress (CCME) jumped 10% in heavy volume. The stock is forming the right side of a cup base. Unless it forms a handle, the potential buy point would be 22.40. China's largest television advertiser on buses announced today that it won three new contracts.
http://www.investors.com/NewsAndAnalysis/Article/559712/201101131331/US-Stocks-Hover-Near-Break-Even-Line.htm
Good afternoon everyone, the market continues to hold in strong near multi-year highs. I came in long a little China MediaExpress Holdings (CCME) overnight based on how strong it closed yesterday, and the fact that it finally cleared my $17.50 level and held. CCME was my play of the day last Thursday, but I cautioned that it may take a little while to develop. It took almost a week, but we finally got the move I was looking for. CCME is currently trading above $20.50, which is about $1.50 away from all time highs.
http://blog.t3live.com/2011/01/patience-is-trading-virtue.html
Below are the bottom five companies in the Advertising industry as ranked by the price to book ratio. Companies with high ratios often present less value to investors, all else being equal.
China MediaExpress Holdings (CCME) has a price to book ratio of 4.2x based on a current price of $19.63 and a book value per share of $4.7.
http://www.investors.com/NewsAndAnalysis/Newsfeed/Article/124828678/201101150904/Arbitron-is-Among-the-Companies-in-the-Advertising-Industry-Offering.aspx
Funny how it bounced off the TOP of the upper bollinger band.
Thanks for detailing this info, Marty. This presentation sheds some light on airport/intercity revenue and rate breakdowns, pages 22-23:
http://www.scribd.com/doc/37128664/CCME-Beijing-Sept-092010
Specifically the airport rates are closer to 15-16x intercity rates.
Plus increased passenger flow through the existing airports will lead to more airport shuttle buses - that organic growth must be happening now, we just don't get PRs from management saying that the Beijing airport has added 10 shuttles this month, for instance. But imagine the growth rate of business travel alone into and within China... crazy growth potential.
And THEN there's the tourist buses looming -- !