China MediaExpress Holdings, Inc. (fka CCME)

[Shengli]

SA CCME

http://seekingalpha.com/article/250192-7-small-cap-short-squeeze-candidates-for-2011?source=yahoo

China MediaExpress Holding (CCME): CCME is the largest TV advertising operator on inner city buses and airport express buses in China. With strong margins and excellent returns on investment in a fast growing market, why the hate from short sellers?

The culprit, a report put out by Citron Research on Jan. 31, 2010, claiming the company’s growth story is too good be true, the that company is a “phantom” and that "no one in China has ever heard of [China MediaExpress].” CCME has come out defending itself against the piece, and many commentators have pointed out that Deloitte audits the company and that CV Starr’s Hank Greenberg is a shareholder. But that hasn’t stopped the shorts. Short float is 35.17% at the time of writing.

It’s too early to say for sure exactly what’s going on here. If the uncertainty around this issue clears, it’s highly likely the company’s share price could appreciate significantly, albeit with a fraud discount, as a shorts cover their positions. However, if more evidence appears pointing to a massive Enron-style fraud, there is still plenty of room for CCME to fall. Our own due diligence suggests the company is not a fraudulent operation.