China MediaExpress Holdings, Inc. (fka CCME)

[stockgenius]

Is this all part of the management/lawyer's strategy?

Read the following new release from the company:

March 21, 2011

FUJIAN, China, March 21, 2011 /PRNewswire-Asia/ -- China MediaExpress Holdings, Inc. (Nasdaq:CCME - News) ("CME" or "Company"), China's largest television advertising operator on inter-city and airport express buses, reported today that the NASDAQ Stock Market ("NASDAQ") has sent a letter to the Company to the effect that as a result the Company's recent announcement regarding the resignation of its independent registered public accounting firm and the resulting delay in the filing of its Annual Report on Form 10-K, NASDAQ was exercising its discretionary authority under Listing Rule 5101 to require the Company to submit a plan of compliance regarding the filing of its Form 10-K not later than March 31, 2011. The Company intends to comply with NASDAQ's requirements on or before the deadline set forth above.

But no new release was seen on or before March 31, 2011 on the compliance. What happened that? We the longs were wondering.

Then this piece hit us:

April 4, News Release

FUJIAN, China, April 4, 2011 /PRNewswire-Asia/ -- China MediaExpress Holdings, Inc. (NASDAQ:CCME - News) ("CME" or "Company"), China's largest television advertising operator on inter-city and airport express buses, reported today that the NASDAQ Stock Market ("NASDAQ") has sent a letter to the Company to the effect that NASDAQ was exercising its discretionary authority under Listing Rule 5101 to suspend the Company's common stock from trading on NASDAQ effective opening of business on April 12, 2011, subject to the Company's right to appeal such determination to a hearing panel not later than April 8, 2011. The Company intends to appeal NASDAQ's determination before such deadline.

So CCME did not submit a plan after all, instead they choose to appeal? Question is, why choose such a risky route?

April 8 deadline has passed. On Aoril 6, we saw this:

April 6 Form 8-K filing

On April 4, 2011, China MediaExpress Holdings, Inc. (NASDA: CCME) (the "Company" or "CCME"), issued a press release, attached to this Current Report on Form 8-K as Exhibit 99.1, reporting that the Company received a letter on April 1, 2011 from The NASDAQ Stock Market indicating that it failed to satisfy the listing standard specified in NASDAQ Rule 5205(e) and, as such, its securities are therefore subject to being delisted from NASDAQ. Specifically, the Company has failed to file its Annual Report on Form 10-K with the Securities and Exchange Commission on a timely basis. The Company has appealed this determination and requested a hearing before a NASDAQ hearing panel. There can be no assurance CCME's request for continued listing will be granted.

(bold mine)
Strange thing: there is no mention of March 31 filing of a compliance report. NASDAQ did not want to delist the stock because it failed to file 10-K with SEC on timely basis.

Pleasant surprise (for the longs): "The Company has appealed this determination and requested a hearing before a NASDAQ hearing panel."

Some very knowledgeable people here are speculating it takes 30-45 days before the panel even convene and discuss and some during of equal length before they reach a conclusion. So we are looking at 60-90 days before the panel decides.

If the panel decides in the company's favor (to allow it to continue to be traded in NASDAQ, I have to be clear here, as sometime that is not clear any longer), then the company has time to perform a forensic audit and submit re-statements and new 10-K?
So we are talking about a number of months from that point on.

If the pane decides against the company, then of course the longs are all doomed, only a possible "short-squeeze" could salvage some of our investment. But long term, the company's stock is doomed.

When I watch the behaviors of the company recently(CEO Fortune appearance, switow.com updates, hiring ad, and 8-K filings), I
see a responsible company entangled in regulation/legal mess that it is trying to fight its way out.

Of course, I am long, so I am entitled to some wishful thinking. The stock could be a scam,and all the actions could be just smokes to fool more investors.

Not filing before March 31 certainly puzzles more the most, and action (or lack of action) is out of character of the company.

My question is, and I submit it to the very knowledgeable people here: does choosing the appealing route on April 4 instead of filing for extension before March 31 gives the company more time?

If choosing the uncertain and risky route is intentional, could it be part of the grand plan of the CEO and lawyer to keep the stock halted for as long as possible, longer than it would be allowed if it filed a straightforward compliance plan on or before March 31?

If it is true, the lawyer and CEO surely know how to take the investors for a roller-coast ride.


Thanks in advance.

Eric.