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Muddy Waters Skewers China MediaExpress Holdings (CCME), See 60%+ Downside

Tyler Durden's picture




 

The firm which exposed RINO for the fraud it is has released its latest target: Chinese company CCME.

Muddy Waters LLC has initiated coverage on China MediaExpress Holdings, Inc. (CCME) with a Strong Sell rating and an estimated value of $5.28.

  • Muddy Waters, LLC believes that CCME is engaging in a massive “pump
    and dump” scheme whereby it significantly inflates revenue and profits
    in order to enrich management through earn-outs and stock sales.
  • We estimate that CCME’s actual 2009 revenue was no more than $17 million (versus $95.9 million it reported).
  • The data CCME provides to advertisers shows that it has fewer than half of the 27,200 buses it claims to have.
  • The CTR reports that the Company uses to support its claims contain
    gross errors that we conclude are due to manipulation by the management.
  • We estimate that over half of CCME’s network buses do not actually
    play CCME content. Rather, drivers play DVD movies that are often
    provided by passengers.
  • We caught CCME’s management telling a particularly egregious lie –
    that its new website (www.switow.com) has entered into an agreement with
    Apple (or one of Apple’s) distributors. Neither is true.
  • Similar to RINO, CCME is an obscure company in its industry. Media
    buyers who would have to know it if CCME were to be believed have never
    even heard the Company’s name before.
  • CCME’s core audience is sub-Greyhound Bus demographic.

Full report (pdf)

 

 

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Thu, 02/03/2011 - 14:20 | 931596 Bill Lumbergh
Bill Lumbergh's picture

That explains the 20% drop in a matter of minutes...but good enough for a quick in and out of $100...at least buys me a few bottles of wine before the Bernank necessitates the use of $1,000 bills.

Thu, 02/03/2011 - 14:47 | 931764 tonyw
tonyw's picture

When the directors are dishonest how can the company have any value?? They will just loot anything left.

 

Wed, 07/27/2011 - 07:31 | 1497113 kiran1234
kiran1234's picture

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Wed, 07/27/2011 - 07:32 | 1497116 kiran1234
kiran1234's picture

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Thu, 02/03/2011 - 14:23 | 931655 Horatio Beanblower
Horatio Beanblower's picture


That was a big takedown. "China MediaExpress: Groundwork, Research, And Videos to Disprove Allegations" - http://seekingalpha.com/article/250498-china-mediaexpress-groundwork-research-and-videos-to-disprove-allegations?source=marketwatch

Thu, 02/03/2011 - 14:31 | 931690 HelluvaEngineer
HelluvaEngineer's picture

Will one of these groups please take a look at BIDU, the worthless censored search engine in China that claims huge growth, quarter after quarter?

Baidu continued its impressive growth trajectory in the fourth quarter, almost doubling revenue year over year to CNY 2.45 billion, thanks to a 24% increase in the number of paying customers and a 56% increase in average spending per account from the year-ago quarter.

...the current market price implies forward price/earnings of 55 times, enterprise value/EBITDA of 41 times, and a free cash flow yield of 1.8%

Thu, 02/03/2011 - 14:43 | 931733 Oh regional Indian
Oh regional Indian's picture

Feels like a snapshot of the coming trade-wars...but played out on Zero-Hedge.

Sure Chinese companies Pump and Dump.

While US companies inflate and explode.

Same end result.

A 100 of these chinese fake companies will not one Enron make.

ORI

http://aadivaahan.wordpress.com/2011/02/03/my-vision-for-cairo-and-giza-4th-february-2011/

Thu, 02/03/2011 - 15:02 | 931834 callingnew
callingnew's picture

this is old news to citron research.  bear meat with a squeeze of lemon.

http://citronresearch.com/

Thu, 02/03/2011 - 15:03 | 931837 Dingleberry Jones
Dingleberry Jones's picture

I still want to know what's up with Muddy Water's CGA call.  They've shirked the shorts and have moved back up. Their execs have also refuted the MW report.  Awaiting an MW response.

 

Thu, 02/03/2011 - 19:20 | 932929 slaughterer
slaughterer's picture

I have analysts double checking the MW report.  It contains some false information about CCME from old, outdated websites of their clients.  It really looks like the shorts that were getting squeezed paid MF off to publish this.  Disclaimer: no position.

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