China MediaExpress Holdings, Inc. (NASDAQOTH:CCME)

CAPS Rating: 3 out of 5

The company provides advertising on inter-city express buses in China.

Recs

3
Player Avatar FoolHardyTodd (< 20) Submitted: 3/8/2011 8:36:17 PM : Outperform Start Price: $12.90 CCME Score: -126.48

This stock has been knocked down from almost $24 to $13 on "reports" from Citron and Muddy Waters who have not provided any strong evidence to back thier claims against the company. However, the FUD has crushed the stock
Meanwhile, China Media Express, who has a relationship with Starr, underwent a lot of due diligence prior to their contract beign signed. They also agreed to Deloitte auditing them as part of the agreement and no problems were found on last years 10-K signed by Deloitte. Global Hunter went to China after the Citron and Muddy Waters issued thier claims, and they found no evidence of fraudulant activity or issues with the numbers at all and they veriified roughly half the contracts. In addition, the contract signed between Starr and CCME would have major negative financial impact on the CEO if they missed the numbers.
I find it MUCH more plausible that Starr's due diligence, Deloitte's due diligence, and Global Hunter's due diligence are correct and that there are no issue with the books. that scenerio seems much more likely than two known outfits that are shorting the stock and didn't actually do any ground work or even communicate with the company (except a dubious phone call) are right.
When Deloitte signs off on this 10K on March 15th or 16th, I'm betting the stock will soar back to $20+ as shorts are forced to cover. There are going to be some shorts losing their shirts if I am right.

Member Avatar NajdorfSicilian (99.87) Submitted: 3/11/2011 3:07:08 PM
Recs: 0

'When Deloitte signs off on this 10K on March 15th or 16th, I'm betting the stock will soar back to $20+ as shorts are forced to cover. '

How much would you like to bet?

'and didn't actually do any ground work'

Why would you lie about the research of the short-sellers?

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