Replies to post #16208 on China MediaExpress Holdings, Inc. (fka CCME)

[eyedoc]

I share your frustration having a majority of my portfolio in CCME and CHBT. It's a catch 22 that we need institutional backing to shake loose the shorts and it is really hard to shake them out without the help of the big institution. It will be incumbent then on management to do this heavy lifting. We're in a blackout period, but at the next earnings report and CC I would have to rethink my investment here if they do not 1)announce and act on a SERIOUS buy back and 2)announce a serious immediate dividend. They have talked the talk, it is now time to walk the walk. Shorts are in control and they know it as they currently load up for another round of pain.

[abh3vt]

How can this cycle be broken?

I would recommend the following:

a) Hire a top auditor for FY11, preferably top 4.
b) Remove all shelf registrations and publicly state that no capital raising activity will occur in the future until valuations normalize.
c) Buy back your stock - and follow through. (subject to cash amounts held offshore.)
d) Institute a dividend. (subject to cash amounts held offshore.)
e) Explore ways to go private in a reputable way...as opposed to the ENHD way!
r) All top management start buying company stock immediately.

I agree with you that the reverse merger/SPAC method of going public is probably broken beyond repair.

Once trust and confidence are broken, valuations no longer matter.

I will say that two companies I've followed for a long time, CBPO and SOKF were investments of IDG-Accel after they completed their RTOs, and that has stabilized their stocks. So, there is hope....but its faint, and so many of these companies have made terrible mistakes with their capital raise activity and poor shareholder relations that no one trusts them to do the right thing anymore.

[Must Be Patient]

Well my perspective is that it comes down to fear vs. greed. Fear is the more intense emotion, but greed is incredibly powerful too. Over time, investors *will* bid up undervalued assets if they really are undervalued. The post you made sounds like many posts I saw in spring 2009 along the lines of "yes stocks are cheap, but it doesn't matter because people won't buy them". I can tell you that many very smart people were thinking that way in 2009 and it turned out to be way wrong.

What exactly caused the bullish sentiment to come back? At bottoms, when stocks start getting bid up, people that are either positioned bearishly or on the fence have to buy back in to get the returns they are looking for.* That's a long-winded way of saying that higher prices will beget higher prices.

*As an example, in spring 2009 people had the choice of cash earning 0%, bonds earning 2%, or stable stocks with earnings yields of 15%+. FWIW even today, stocks like CSCO and INTC are selling at a EV/FCF of 10 while cash still earns 0%.

[tootalljones]

I am buying back in to CCME.pk Love it at $1.10