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.
