Great China Mania Holdings, Inc. (OTCBB:GMEC) Ditches Unsuccessful Subsidiaries

Things are finally starting to go in Great China Mania Holdings, Inc. (OTCBB:GMEC) way. After the ticker was pounded to the ground with consecutive pumps, they regained some confidence and managed four consecutive closes in the green. Yesterday they closed at $0.025 which more than doubles their Monday close of $0.012. This climb up the stock chart was long in the making.

First they announced the repaying of a convertible note by cash in order to prevent its conversion into shares and the further dilution of their stock. Any move trying to maximize shareholders’ value is a rare sight in the penny stock world but that was just the beginning for GMEC. They took what it seems to have been a long and hard look at their business structure and decided that is time for a change.

After two year of operations GMEC sold its wholly-owned subsidiary Great China Games Ltd., which taking into account the numbers in their annual report is perfectly understandable. GCG had declining revenues and a net loss of $51 thousand. What is more surprising is the decision to also cut Great China Media Ltd. It also had a negative income of $51 thousand but this time around it was offset with the whopping $4.8 million in revenues.

Also, quite strange are the conditions of the deal, according to which they will part with GCM without receiving anything from the buyer except his assumption of the liabilities of the subsidiary. Next week they are supposed to file the financial report for the first quarter of 2013 and if that is truly the case maybe we will find answers there.

GMEC has been target multiple times in the past by promotions. Each the the story went the same – a small climb followed immediately by a bigger drop. Nothing can guarantee that the this won’t happen again in the future especially after the recent resurgence. It is never a good idea to underestimate the volatility of the stock and with some questions still hanging around GMEC, the decision to invest shouldn’t be taken lightly.