China Mediaexpress Holdin (NASDAQ:CCME)

On October 15, 2009 Tmi Entertainment & Media approved its business combination with CME media. This is exciting news on two fronts:

1. On June 25 2009 we coded TMI a GeoBargain. We were a little weary of doing so because the consummation of a merger was not yet a done deal. However, based on the Company's aggressive financial performance targets and clean balance sheet, we felt  that TMI offered a nice opportunity to participate in a hot China industry sector. The GeoTeam® thinks that the stock may offer some significant upside from current levels.  [[See valuation scenarios]]

2. The approval of the business combination justified the warrant arbitrage strategy we highlighted on September 1, 2009, thanks to GeoContributor "Drexion".  The warrants saw an increase in price from $0.16 to $1.81 in roughly 6 weeks from our first mention. Ironically, with TMI currently trading at $7.88, the warrants are still mispriced with an intrinsic value of $2.38 (warrant strike price is $5.50). That doesn't even include a premium for time value as the warrants have a two year expiration.

This was a great example of the internet creating a social medium for investors to get together and formulate an incredible opportunity that we all could profit from.  Keep up the good work everyone!

Disclosure: The GeoTeam owns TMI warrants. Our plan is to slowly sell the warrants as they approach intrinsic value.