The Story

China MediaExpress (CCME) is a small-mid cap China stock specializing in television advertising network on inter-city and airport express buses in China. This counter has been attracting reviews and comments from many investors mainly due to its spectacular results. An article by a blog from Citron Research recently has created huge panic reactions from the market, causing CCME stock price to plummet almost 30% to $16.66. Is this a value buy or a case of fraud?

The Dark Side

Citron Research claimed that CCME is just a “phantom” company with an overly lack of transparency in its story. In spite of having spent a mere fraction of what competitors have on infrastructure, CCME has purportedly grown profits from $2 mil to its recently raised guidance of $85 mil. Over the last 8 quarters, CCME reported generating $95 mil of cash flow after all CAPEX and for-cash acquisitions. ...