Updated with share price rally in China MediaExpress.
Shares of China MediaExpress, which operates a television advertising network on buses in China and was created through a reverse merger, plunged 33% Thursday after California-based Muddy Waters Research accused the Chinese company of "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."
Muddy Waters says it has a short position in the stock, and therefore stands to realize significant gains in the event that the price of stock declines.
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