Replies to post #19679 on China MediaExpress Holdings, Inc. (fka CCME)

[rjeezy007]

Think about it. A signed off 10k reduces the chance of fraud by a huge amount. Then a dividend and buyback show us the cash is really there just in case we think deloitte missed it. Therefore, if the cash is proven what else do you want? The essential point is the cash since the company's receivables are much smaller.

[jwangatusa]

Address False Accusation

So you think CCME does not need to address the falsified accusation by Muddy water, Citron and Samching etc?

How? When one side say you are not trustworthy, does anything you say can change it in one statement? It just make us long feel a little bit better. Will not change the people that decide to step on the side line because they think it is a reasonable doubt.

Company can try to find other audit company and do some check up. In the end, people can still point to the fact that those companies are take pay from CCME, so they can be all part of the fraud or not qualify enough to identify fraud.

Company already opens their book to Starr and have his people did the check. And Starr has one guy on the board.

Unless you think the company should really open itself up so everyone can know how it runs its business, get all its relation, and all the detail of their contracts, so if anyone ever wants to take their customer out, they can easily do that. If anyone want to compete into their market, they have a simple way. Than what is the most likely way for company to verify themselves?

We have vest interesting in the company, so we will pay attention to their news. But it is a small company operates in China, any dispute the company put out, in few month will be gone from most of the financial link.

Company has came out and rebuttal the WM and Citron article to certain degree. We will see if the company bring other source. In one way, based on what GH's description, I think company kinds of try to do what they can to use GH as a third party and verify themselves. Is it really helpful? I don't believe it even good for some of the longs.

Focus media has PE ratio about 50 as of today. This one has pe ratio about 5. Even if you assume there is a certain uncertainty about the potential fraud that discount it to 50%, it still mean company will be trade at pe 10, compare to pe 50. Basically, the market say the company is only earning of 1/5 of its actual earning. Or 80% of the company's ad are free.

Baidu at one time is about $10, Sina at one time is $2. It will take time for the company to establish the trust. We will see if the company will do what they say they will do.

But even if it did all the 4 things you ask, the short interest will still be strong. And consider most of US company will fold in 10 year (or failure rate is about 80%). Even if company has survive 5 years, it still have over 50% chance to fail. It will be a very long battle. You will be better to think your plan if you want to be in for a long time, or just trade for a short term after the 10K wave and stay on the side line for next opportunity. And if you really think about owning it for a long / long time, you may want to figure out what you believe the company should do to let you believe they will not just care their own interest. You do know that the CEO probably will stay in the company for at least 30 years (most CEO that starts the business seldom step out), and Starr may have different plan than you (they can private the company and relist it on HK) assume the company has the profit margin and can keep it for a while.

On the other hand, every big company at one time will have to go through this same process.

In the long run, it maybe better for the company to pay attention on their website presentation and try to sell themselves better there.

I think if they should try to back the talk, repurchase the stock, pay dividend, if within enough business flow, hire a third party to verify themselves. And if they care about the stock price, maybe do a 2nd over through a big investment company.

In the short term, I am not quite sure if the company get any business from their main website. It probably be better they try to bring the traffic to their SWITOW site. And maybe make it a mobile phone platform. It will be a bigger market in mobile phone ad.