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GeoInvesting Responds to Hit Piece on CCME

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Citron attempted to rock the boat by publishing a hit piece on CCME mid day, yesterday. Please see article here.
In a recent GeoAlert, we posted the article from Citron Research regarding CCME. In response to the article, we have prepared the following points to stress to our readers:

At first glance, the accusations do not look too impactful as to insinuate outright fraud. It appears to be merely an attempt to establish some doubt by exaggerating the truth. For example, the report questions CCME’s competitive position by referencing a top ten list of companies Citron claims are in CCME market. Citron then shows that CCME is not in this list. While this last statement is “true”, we had Bob dig a little deeper:
“I went through this report already. Yes. CCME is not in the list mentioned by this report. But I also went through these ten companies. I do not see any of them in the niche market of CCME (commute bus between different cities, similar to gray hound in the United States). The listed companies are in a different bus market (public transportation within a city, such as MTA of NYC).”
As CCME has had a strong run in recent months, we fully expected a hit piece from the short side. However, we did not expect one to be this imminent. Upon further reflection, they probably needed to begin to instill fear. CCME looked to be consolidating after its recent run, gearing up for a second leg up. Also, it’s possible that the hit piece is being timed to make an impact before the 2010 audit is completed, validating CCME.
Regardless, CCME is a tier-one company and we will take the allegations very seriously. We will consider beginning our own due diligence on CCME shortly. However, others have offered a swift response to the Citron Report. Please see SA article and Global Hunter comments. Conservative investors need to be aware that Citron and related players are to sure to keep firing away at CCME. Until a better argument is constructed against the CCME story we can not give up on this tier one name. Our exposure is less than 20% to the ChinaHybrid space and if we are going to make a bet on a non-IPO company it will be CCME.
Please see recent message board posts regarding our thoughts on CCME.

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