China Biotics Inc (NASDAQOTH:CHBT)

I had planned to just let my original thumbs down ride until this scam was trading close to nothing following the resignation of their auditor but after a mysterious run up on no news I decided to cash wash rinse and repeat. Why not pick up another 90 or so points and more accuracy. When someone gives you a gift you should take it.

fraud

Back for another re-up on this sweet scam. Pitch from last closed pick on CHBT copied below:

"Shorted this around $11.50 in November in my "play money" account and got a little burned as a result of the aggressive public relations done to attack the credibility of its critics and the dog and pony shows staged to impress some naive seeking alpha contributors. It is just a matter of time and the price will reflect that this company is guilty of fraudulent misrepresentation of its key metrics and the entire nature of its business.

Toughest question for CHBT to answer from my perspective: When the question of identifying the claimed number of stores arose, the response was that close to 100 had recently been closed. How does one do that with no reduction in reported headcount or revenue?"

Not as hard to jump on CHBT now as the auditor has resigned and CHBT is not being very aggressive at all in its efforts to defend itself. This won't be around too much longer.

Tracking portfolio for China based companies that gained listings on US exchanges (Nasdaq, NYSE, or Amex) after conducting reverse mergers. Stocks that have been delisted have been omitted. Start date: Jun 24, average P/E of these companies: 3.

I've learned a little trick these Chinese companies are using. Have you noticed they all have China in their name? How many companies do you know that have America, Canada, Germany, etc... in their names? The reason they put China in their name is to draw in foreign investors, because China means growth. Most of these companies are frauds and you should stay away from them.

Citron

fraud? not looking good...

This is a tracking portfolio of all CAPS-ratable tickers in the Chinese RTO/SPAC space (i.e., companies that listed without filing an IPO).

China-Biotics, Inc. went public via a reverse merger in 2006. The company is based in China.

Another too good to be true scam Chinese RTO

Price/earnings of 6.22, Price/book of 0.93, Debt/equity ratio of zero, Return on Invested Capital (TTM) of 25.93, produces probiotics products in China.

good leadership

PEG ratio is too low for this company, plus growth in China itself will be good.

Short interest: 48% of float

Looks like fraud allegations are proving untrue

I believe CHBT to be a fraud. Some people disagree.

The case for fraud:
http://www.citronresearch.com/index.php
http://chinesecompanyanalyst.com/
http://www.therealchbt.com/
http://seekingalpha.com/article/213213-orient-paper-not-all-bdos-are-the-same

The case against fraud:
http://seekingalpha.com/article/227866-china-biotics-pictures-provide-evidence-of-a-high-quality-business
http://seekingalpha.com/article/227548-china-biotics-your-next-5x-investment
http://seekingalpha.com/article/225461-china-biotics-refuting-citron-research-s-claims

I think it is also important to consider why any company would raise 75 million and leave the money in a USD denominated bank account for over a year.

I beleive this guy over the anonymous attackers...

http://seekingalpha.com/instablog/691175-jason-nevader/96700-china-biotics-due-diligence-exceeded-expectations

Reverse merged Chinese small cap. Too close to scamming practices. Read this.

http://www.citronresearch.com/index.php/2010/09/14/china-biotics-chbt-is-a-fraud-%e2%80%93-now-sue-citron-we-dare-you/

Huge potential ... is down due to scare tactics

Citron Research