i don't think it is a good idea to short Zhonggai. It is not that simple
Zhonggai has "willingness" to report bad ERs just because they secretly plan
to go private. A bad ER would also have big bad impact on company. Nobody
is stupid, especially it involves big money.
But of course, you need to buy good names. On my list, tie 1 has bidu/ntes/
baba/tencent. Tie 2: sina/sohu/qunr/ctrp Tie 3: yoku/qihu/jmei etc.
If you want to relax, just buy dips on stocks in tie 1 and forget others.
They all have very reputable leaders and are almost impossible to go private
. Even if they go private, they would offer very good price. Tie 2 also has
limited risk. It is hard to say on Tie 3, but I intend to believe their CEOs
.