China MediaExpress Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of China MediaExpress Holdings (Nasdaq: CCME  ) plunged more than 12% in early trading and remain down more than 9%, continuing a tenacious tussle between long and short investors.

So what: Traders must love this stock. In the past month alone, shares of China MediaExpress have traded between $10.66 and $17.15 each. Roller coasters have nothing on the stock.

Now what: Such stomach-churning volatility has to make investors nervous. And yet there is a growth story here. China MediaExpress claims the leading position in providing bus-based TV ads to China's up-and-coming consumer class.

Citron Research says management's faking. Wall Street analysts say otherwise, projecting 22.5% annualized profit growth over the next five years, resulting in a nearly microscopic 0.24 PEG ratio. Who do you believe?

Interested in more info on China MediaExpress Holdings? Add it to your watchlist. You can also try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is at least 10% better than other disclosure policies.


Read/Post Comments (14) | Recommend This Article (10)

Comments from our Foolish Readers

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  • Report this Comment On March 01, 2011, at 3:34 PM, TruffelPig wrote:

    I am long in CCME and bleeding today really. This is really a bit nerve wreaking - I will never do such speculation again.......anyhow, outcome unclear to me. I am sure I will make it out with a gain since I got in pretty low.

  • Report this Comment On March 01, 2011, at 3:56 PM, NajdorfSicilian wrote:

    I have yet to see even *one* Wall Street analyst ever say anything good about CCME. You must be talking about the 3rd rate guys located in other jurisdictions such as GH.

  • Report this Comment On March 01, 2011, at 4:13 PM, terahertz wrote:

    I am short in CCME and believe its financial statement cooked. I don't deny I am a Chinese and my common sense tell me that an unknown local ads provider simply cannot generate significant revenue as they declared.

  • Report this Comment On March 01, 2011, at 4:13 PM, stills999 wrote:

    I believe the analyst and Citron has a bunch of disclaimers.

  • Report this Comment On March 01, 2011, at 4:14 PM, stills999 wrote:

    I believe the analyst as Citron has a bunch of disclaimers they are hiding behind.

  • Report this Comment On March 01, 2011, at 4:16 PM, TruffelPig wrote:

    This is going to be a dance on the volcano.....man. >80% of the float is in short positions. Earning due March 15. After hours trading points up by so far 5%. I need some medication for my stomach.

  • Report this Comment On March 01, 2011, at 5:36 PM, goldminingXpert wrote:

    Citron is usually right: http://seekingalpha.com/article/251981-a-comprehensive-score...

    Ignore at your own risk.

  • Report this Comment On March 01, 2011, at 5:49 PM, CaSmiles wrote:

    As for Citron; I wouldn't listen to anyone who has a readily available mug shot. I've seen the booking papers as well; all this information is readily available. Amazing. He could be correct 15 out of 15 and still be a crook; his whole business model is a self-fulfilling prophesy; short a stock then drive it into the ground with whopper lies while hiding behind disclaimers. Jeez Louise, "ignore at your own risk"... wow.

  • Report this Comment On March 01, 2011, at 6:27 PM, vivium wrote:

    Who do you believe, a convicted fellon who 'd sell his wife and children to make a lousy buck or someone who did real dd? To me the answer is clear. Those who sold today are a bunch of rats shitting their pants on absolutely nothing! You're making this crook a rich crook! Are you enjoying it?

  • Report this Comment On March 01, 2011, at 6:57 PM, TruffelPig wrote:

    I didn't sell - but I am a bit nervous. I actually got some more when the thing went real low. There was no new news coming out today and this was just an attack on the stock. There is a lot of speculation ongoing obviously when the volume is like 3 million on 11 million stocks in public. But I am not an expert.

  • Report this Comment On March 02, 2011, at 12:20 PM, pillip10 wrote:

    Our company has checked and has done extensive reacher on the company ccme and has put a full out investigation only to realize that its NOT A FRAUD, but in fact Muddy Waters , was orchestrated as a short seller to make money on the down side of such a great company.Most People would chose a foreign company that is in the nasdaq and delegate false accusations to make money shorting.Muddy waters and accomplices will be sued for false accusations and illegal actions toward ccme.Its not legally permitted to make false assumptions about a foreign company for a individuals own benefit.Such as many of these fake website, which my firm is permitted not to mention any specific names.The Nasdaq wouldnt let a company make fraudulent documents saying they made more then they did and pump up sales.Websites are saying CCME is a fraud , but in fact what there trying to say is they changed the numbers , which its not legally possible to do.I still estimate CCME AT 24.75

  • Report this Comment On March 02, 2011, at 12:26 PM, wolverine1987 wrote:

    Citron and Muddy Waters' reports were already obliterated. Check the latest research from GH. You have to respect goldmingexpert, but his single minded focus and complete certainty on this issue is suspicious. While it is possible CCME is overstating and that the shorts case is correct, to portray it as a slam dunk, completely ignoring legitimate claims on the other side, is intellectually self serving.

  • Report this Comment On March 02, 2011, at 12:46 PM, TruffelPig wrote:

    Ok, this is now really really really hot. Today the stock was 14% down at first, now 2% up!!!!!! I got another set of stocks long at under 11 bucks. I am actually really doing well now since I bought a lot on the way down (ya, I know, one shouldn't do that.....). I need pills for my stomach.....

  • Report this Comment On March 15, 2011, at 3:16 PM, NajdorfSicilian wrote:

    pillip and wolvering I hope you take the time to reflect on the utterly idiotic comments you made about people who actually did the research versus the pump and dumpers and sheep that followed them to the slaughter.

    'The Nasdaq wouldnt let a company make fraudulent documents saying they made more then they did and pump up sales'

    You sure about that?

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