Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
It helps Jacky's case since he claims that he didn't know anything was wrong to warrant his resignation until a few days before the halt. This would not have given him enough time to sell his shares. It does not mean that he now still has confidence in CCME after what he has learned.
Overall, however, I see today as a positive. There seems to be an awful lot of effort and money spent on fighting this. I tend to think that if there was enough fraud to justify a $2.00 share price, then this could be resolved behind the scenes with much less expense and fanfare.
They said that they would inform the SEC of the investigation results, and that should start to provide a much clearer picture. I also believe that the attorneys have told Cheng to completely stay out of this for now and let them do their job, while he concentrates on running and building the business. They know that no matter how they spin the eventual outcome (and I'm sure they will do this very well), the inevitable question that will help their cause if answered positively is "Oh by the way, how is the business doing now?".
It should get interesting after the summer if not before.
Thanks,
It seems that after the merger the current shares will only represent 20% of the new company. I guess that means that the new company will have 735MM shares outstanding. That's a lot, especially if they plan to issue more shares for raising capital down the road. This would also mean that in order to get to a $1 per share, they would have to be valued at least $735MM (does that seem possible?). It looks that if they want to list on the NASDAQ at some point, it will require a massive reverse split. What are your thoughts.
TIA
Has anyone done any DD that would show the potential income that this company could achieve with this merger in a few years. I know that most are only here to trade for a few cents, but I was wondering if anyone knows of the long term potential of this company.
TIA
Well, if Cheng has the money, that 30M buyback would just about buy the float now.
Nevermind, figured it out, thanks
TDA will not accept order. Says security not eligible for this market. Anyone else with TDA?
I agree that this is all about the calendar at this time. May seems to be a crucial month for CCME. Since the company requested an appeal on April 8th , and NASDAQ usually grants a hearing within 45 days, CCME should be getting prepared to make their case by the end of this month. Also, since NASDAQ refused the cure period for replacing the independent director, they must be working on trying to fill that position before the hearing. They likely have a new director already picked out, but he is probably waiting for the preliminary results of the investigation before committing to CCME. In addition, by the end of May, the investigation will have been going on for almost a month, which should give everyone a good idea of the issues and the depth of the problems.
So, this is what I would like to see happen before the end of the month, or before the hearing, to give me confidence that CCME is serious about wanting to stay listed and that they will clean this mess up.
1) appoint a new independent director
2) hire a CFO
3) announce that PWC will do the audit
4) 3+ million naked shorts
I believe that this will give NASDAQ enough confidence to allow CCME more time to release their 10k. This will also dramatically shift the fear from the longs to the shorts. As confident as the shorts are at this time (reminds me of us longs in February), they have to realize that IF CCME can stay listed and is actually making $3/share with $200MM in the bank, then there is a reasonable chance that they could get caught in an unprecedented nightmare scenario. I will try to withhold judgment a little while longer, but I believe we will all have a better idea of our fate soon.
Scenario #420
Well, at this point the board has fully discussed, and rightfully assumed, that we will soon delist, go to the pinks, file lawsuits, hire hit men, etc. I have also resigned myself to this outcome and am ready to lick my wounds and move on.
However, for the exercise of understanding more about how the market works, I present scenario #420.
Assumptions:
1) The company is relatively legit by Chinese standards.
2) It has lots of money and a strong business.
3) It knows many influential people in China.
4) Their reputation in China is intact.
If the CEO is unable to stay listed on Nasdaq, wouldn't this be a great opportunity to get listed in HK? Why go to the pinks? Can he refuse to list on the pinks? Simply don't trade until you have your books in order, and then go to a country that understands better or is more tolerable of how Chinese companies operate. With a new audit in hand, you can easily spin past issues. What would happen to our shares at that point? Would they simply be honored on the HK exchange?
CEO Letter comment
I do not have access to the latest version of the CEO letter, but I had a thought about another item that we may want add if it has not been included already.
IMO, assuming that CCMEs issues are relatively minor, a clean audit alone may not be enough to create new momentum for the stock. Auditors will most likely find some small issue and that could be enough for the shorts to say that even though the business is as claimed, management can no longer be trusted.
CCME needs to get on the offensive and make the case that it is the victim of a system that favors manipulation. Because of this halt, we will have an unprecedented opportunity to present accurate numbers with regard to actual shares short, amount of naked shorts, amount of puts, actual float, shares allowed to be borrowed compared to float, etc. If CCME can show that the shorts systematically abused the system at the expense their shareholders, it would go a long way to garner sympathy and support for CCME when the stock begins trading.
Again assuming that CCME is relatively clean, this abuse should become the new storyline and divert the inevitable focus on management. They should hire the best attorney and begin to sue MW and Citron and whoever else is suspect. There seems to be enough questionable tactics out there that digging things up should be no problem. Even if it never materializes into anything, it would be a great PR move. When the stock opens up, we need everyone to to feel like we are the underdog in a corrupt system that has proven its innocence and that the shorts will pay in the end. People love this kind of story and with such distrust in Wall Street, and the blatant attack we have incurred, a good PR company could have a field day with this.
Once proven innocent, take charge and change the story.
Of course this will only work if they truly are clean, but start the process and hire an attorney and begin to build a case. Just digging around will surely reveal many surprises and much ammo for any future attacks.
That's a great analogy. Think about it, everybody is panicked wanting to get out and we all turn around and it's a candle burning in the corner that some five year old easily blows out. Of course, by then the cops have shown up and all those that screamed fire have to pay a huge fine as they leave the building.
Think about it, the shorts are HATING this! They are dying to cash in on all the panic and chaos they created. They screamed "FIRE!" but the theater doors are locked. Now they're hoping they'll open before we all realize the fire is really just a candle burning in the corner.
I may sound a little optimistic or naive here, but it is the fear induced sentiment shift of longs that the shorts are banking on. Now don't get me wrong, I'm extremely distraught, and I am still coming to terms with the realistic probability that I may have lost a lot of money here.
However, what do we really know. Not much. This fact alone does not justify a guilty verdict even though the shorts would want you to believe that it does. At this point it is primarily conjecture. All we really know is that the company has severely underestimated this ongoing bear raid. I believe that they have learned as many lessons as we have learned throughout this process. This is all part of playing with the big boys. CCME probably naively assumed that they could just focus on their business and their success would eventually trump all these games that seem to be played in the US markets. They surely now understand that a successful business alone is not enough. You have to learn how to play this game in order to create the multiples that reward your shareholders. That's why some companies are considered darlings with high multiples and others languish with the same fundamentals.
However, I have to think that they now get the seriousness and importance of protecting shareholder value, and are regrouping and formulating a plan with the sole purpose of getting their company fairly valued with regards to share price. I would suggest to them, keep the halt in place for as long as it takes, take your time and do it right, cover all your bases, and make your common shareholders a top priority. As one poster put it, these longs remind him of a "cult". Why are these longs so die hard and passionate? It's because there is a sense that we have been wronged by someone, and if we find out that it wasn't the company, then you will have to pry these shares out of our hands. Such a dedicated following is an incredible asset to have especially considering shorts still need to buy at least 8 million shares at some point.
I trust that management is looking at all their options and are ready to step it up to the next level of professionalism. This had to happen at some point in their development. This bear raid has just accelerated that process. They hopefully will come out of this much stronger and more savvy in how they deal with the US markets.
I will hold off judgment until I hear from the company and/or the facts become clear. I just hope we aren't forced to trade before we get the facts, because fear will surely rule the day as it does in most things in life.
I totally agree that this is a valid theory. The shorts knew that an evolving capitalistic society would need many years to get their accounting standards and business practices to meet western standards. It is no secret that the accounting industry is having a difficult time dealing with Chinese accounting and business practices when compared to the more rigorous standards of the west. Look how long it took the west to adapt these practices and we still see abuses in this country. Heck, if you look hard enough you will find skeletons in most companies, so I imagine there are a few at CCME. This coupled with the CYA mentality of DTT gave them the perfect angle to spread FUD with the relative security that they would at least get a delay and hopefully even a resignation.
I also agree that Jacky had to become the fall-guy, because the company needed a sacrifice and the DTT relationship and eventual outcome was his responsibility.
The one thing that blindsided the shorts was the halt. I'm sure they were hoping that they would have this stock down to $3 by now and be comfortably exiting their positions. However, the halt has changed the game. If the company is for real with only minor problems, then the company has all the time they need now to put together a plan that will take advantage of the unprecedented short position, and use that to crush them once and for all. I'm sure that CCME now realizes that perception is everything. With the mistrust in Wall Street coupled with Chinese fraud fears, the motto is not the idealistic innocent until proven guilty, but the exact opposite. They must now prove beyond a doubt that 1) the business numbers are real - audit, 3rd party reviews, transparency, etc. and 2) that the company stands behind its shareholders - dividend, massive buyout support, excellent PR to tell their story. If they can do those two things they will regain the confidence of shareholders and the shorts will run for the exits. (BTW if that happens good luck getting shares because your greed has put you in a really precarious position)
The key is that CCME remain on the NASDAQ exchange and that the halt stays in place until they can come out with guns blazing. They have to realize at this point that if they want to continue to trade in the US market, that this is the most important time in CCME's business and how they handle this event will determine their future. Let's hope they are getting the right advice, because if the company is for real, they have, or can get get, all the ammo they need to finally put an end to this mess.
I would imagine that the shorts realize this and will do everything possible to pressure the SEC to lift the halt. If CCME is for real, time is not on the shorts side. The longer CCME has to implement their plan the riskier it is for the shorts.
We longs are coming to terms with potentially having lost it all with only lessons to show for our efforts. However, the shorts better not get too comfortable with their dream win because they may find themselves in a nightmare when this resumes trading in 2 or 3 months.
The last short count was around 8 million with almost 2 weeks of additional shorting not included. Now potentially add to that all of the March and maybe even the April puts that will surely be exercised and that number could be huge (definitely more than the float). It is my understanding that the decision to exercise has to be made on the expiration date (which is likely before any significant resolution of the facts, so the puts would probably be exercised)
Now, in a perfect world (might as well dream), all turns out well with the audit, numbers, cash, new pr, new cfo, etc, in addition, CCME announces it will prop up the price with a buyback, and it does all this before the stock opens for trading. Can you imagine how this would unfold under that scenario? People on the sidelines would jump in, all strong longs would hold, and all those shorts would have to cover. Where would they get the shares? Epic.
The shorts have won the battle for now, but the war is not over. If the CEO meant what he said in his letter with regards to his loyal shareholders (which btw would also be in his best self-interest) and is, as one poster said an "honorable man", then the final play is still his to make. In addition, with the halt in place he has all the time he needs to line it up perfectly. Assuming that there are only minor problems, the CEO needs to realize that this is a once in a lifetime opportunity to use the unprecedented short interest (#1 shorted stock on NASDAQ) to his advantage. Once he can get the shorts to begin running for the exits it will be all over, so put together a plan that will do that. Again, assuming no huge problems with the company, this should not be that difficult to do.
Anyway, it's more fun to dream while waiting. Still, stranger things have happened.
Saw this on YMB. Just another theory, but this would be the ultimate reason for the halt. In essence telling the SEC that there seems to be a discrepancy with the share count, and before we release this clean audit, we better get a handle on where all these shares are going to come from (the numbers may be off, but you get the jest).
According to the latest DEF14A filed by the company, all officers and other private investors hold 76.7% of all diluted shares.
Institutions hold 21.9%.
CV Starr is included in both and holds 15.2%.
Other institutions hold 6.7% of shares.
76.7 + 6.7 = 83.4% of all shares.
The rounded remaining 16.6% of all diluted shares is: 6,624,000
Considering that this includes a possible 3,000,000 shares to be issued when CV Starr converts their preferred shares, There really is only around 3,600,000 shares floating around.
With a short interest of 7,827,000 there is something going on.
Going on 10 days on the SHO list, there might be an issue in obtaining shares to fill these "non-existent borrowed shares".
The company may have requested a halt to protect shareholders. While they resolve the missing borrowed shares.
JMHO
I'm assuming that there are tons of longs who have jumped on the option wagon over the last month, me included. I was wondering if you know what the potential impact is on the share price if or when thousands of these calls get closed out at the same time after the initial pop of the pps?
Thanks,
Thanks, so is it correct to assume that we will either see this extension form filed by the 16th or get the 10k results by that date?
Earnings date question.
It is my understanding that the financials must be made public by the 16th (75 days after the end of the year). If they are not going to be ready by then, I assume an extension must be filed by that deadline. Is that correct thinking?
I have March calls and would like to get some clarification and any opinions on the likelihood that we will get the audit before next Friday.
Thanks for your thoughts.
Thanks for the responses.
If there is a suggestion by the SEC that a couple of days notice is considered reasonable, then one could infer that if CCME wants to spring this surprise on the shorts before the 15th, they would announce on Friday after the market closes and let it fly Monday morning.
That would make it a hell of LONG weekend for the shorts :)
I'm not sure if someone has answered this already.
Does anyone know if there is a requirement by the SEC to give notice to the public of an upcoming earnings release?
I was assuming at this point that CCME is not going to give notice, wait until the last day (one day before regsho), and then provide the shock + awe earnings show. However, I wasn't sure whether not giving notice is allowed by the SEC.
Thanks,
Fellow longs,
Sorry, but this turned out to be pretty long rant. Disclosure, I have been long CCME since August 2010.
First let me thank each of you for the tremendous effort that you have put into your research to defend CCME. I have never seen such loyalty to a company. I hardly post, but I have been reading your comments diligently throughout this bear attack.
This brings me to my first point of observation. I can not believe that an investigative reporter has not picked up this story to highlight that there is something seriously wrong with our markets. This case should give any reputable reporter the opportunity to discuss the inadequacies of the SEC, the prevalence of illegal shorting (naked shorting), the laxness of RegSho, the existence of paid bashers, and the manipulation of media to feed greed that perpetuates a guilty until proven innocent mentality. Since this has received such national attention, and whether the accusations are true or not, it should be easy to use this case as an example to highlight these issues.
Not withstanding the fact that defending accusations with strong evidence is invaluable during this time, we seem to be losing the moral battle that this is just wrong and un-American. This attack should strike a chord with every decent human being. Our strength lies in the fact that Americans believe that people should not be abused by those with power, and that we will not stand for that kind of abuse. It seems like such an obvious opportunity to write about a subject that has effected each of us tremendously in the last few years and is way overdue to be fixed.
This brings me to my second point. I realize that a reputable investigative article that highlights an abusive attack on a Chinese company is unlikely (we may have had more sympathy if it had been an American small cap, but probably not). So, why do I continue to hold my shares, which now represent a large portion of my portfolio? First most, I believe that they are innocent and therefore this will eventually clear itself out. Also, after reading the CEO’s response, it is evident to me that CCME is pissed. CCME has been dealing with this issue for a long time, and they realize that their success is now tied to resolving this problem once and for all. This sets up a potential battle of epic proportions, which because they are in the right, they will eventually win. I expect them to pull out all the stops soon that could send this stock, as the YMB likes to say, to the moon. Here is what I would love to see:
1.CCME is expected to make at least $100 million this year.
2.CCME currently has no debt.
3.Go to your local friendly bank and borrow $100 million and put that into an account designated for buying back shares (this should not be a problem since it only represent one year’s income). Add the $30 million already designated for that purpose.
4.Announce that the board has expanded their buyback program to $130 million.
5.This may be enough to put an end to the shorts arrogance, if not
6.Buy up all the shares that it can get, leaving only the die hard believers.
7.Announce that there are only 3 million shares left in the float.
8.When the stock skyrockets to $100 go to GS and do a secondary for 1 million shares to pay back the loan.
Though this may sound unlikely, my point is that you better believe that CCME is looking at all their options to make this problem go away once and for all. Keep in mind, they may have underestimated the shorts and been caught off guard, but they make a lot of money every year, have no debt, have a relatively low float, and have lots of available cash. You better believe that they have options to put this issue to rest once and for all, and reward all of those investors that have stuck by them.
Thanks for letting me rant. GL