Can you spot a lie? What about a half-truth, a sin of omission or the telling smirk of someone who thinks they got away with it? How about the grand lie, so big it has pillars and caverns of mis-truth, or the subtle wave of misdirection?
Short sellers like to look for lies, in company accounts or in what management say. Find one, stick a red flag in it and go looking for more, on the basis if there’s one there’s several: lies multiply. There is also a small cottage industry in the art of deception, from books of facial expressions to help you play poker all the way to ex-CIA consultants offering interrogation advice.
For instance, the latest report from Muddy Waters on the commodity trading group Noble, which includes some “third party behavioural analysis” of management statements. Read more
Muddy Waters’ Carson Block has made some big claims about the companies he and his colleagues have targeted and shorted, the latest of which is Olam. But the extent to which the market has been willing to follow his trades has been falling. More importantly, the willingness of sovereigns to support their listed companies has been rising. The combination of the two suggests shorting Block-style is getting less profitable. Read more
Here’s embattled agriculture combine Olam on Tuesday morning:
Carson Block has faced some criticism in the past couple of days (such as from the FT’s Lex) for the week-long delay in releasing the promised Muddy Waters’ report on Singapore-based Olam International.
But the wait is over. The report was published on Monday night. Block has not skimped on his allegations, so have a new ink cartridge ready if you’re planning on printing out all 133 pages. Read more
Hedge fund managers piled into the Marriott on Grosvenor Square earlier this week for London’s first Sohn conference. The headlines were dominated by Carson Block’s announcement that his next target was Olam International, but we wanted to give you a quick run through what the others had to say. Read more
With his reputation suitably inflated from his Sino-Forest adventures, Carson Block’s next target is Olam International, the Singapore-based commodities trading group. As usual with the companies Block focuses on, it should be assumed that that his firm, Muddy Waters, is shorting the name.
Speaking at the Sohn London Investment Conference on Monday, Block questioned Olam’s accounting practices, declaring that the company was engaged in “constant ‘reclassification’” of certain parts of its balance sheet. He alleged there was a case where “office supplies became biological assets”. Read more
We take it back, perhaps the Canadian regulators have absolutely nothing to teach their US counterparts.
A few hours after suspending trading in Sino-Forest shares and ordering the executive team to resign, the Ontario Securities Commission issued the following statement: Read more
This really wasn’t what Sino-Forest hoped for when it welcomed the Ontario Securities Commission investigation following the release of Muddy Waters’ now infamous report into the firm.
The OSC has decided to not wait around for Sino-Forest’s independent investigation. Read more
Sino-Forest shares have climbed since billionaire investor Richard Chandler disclosed his stake in the company, Bloomberg reports. The Chinese tree farming company’s shares rose to their highest level since Carson Block’s firm, Muddy Waters, published a report claiming it had overstated its timber holdings. The shares rose as much as 12 per cent in Toronto on Tuesday. Mr Chandler’s Mandolin Fund disclosed on July 20 it had built up 26.7m shares in Sino-Forest, or an 11 per cent stake, making it the company’s third-largest investor. Chandler became one of New Zealand’s richest men partly by pushing for reforms at South Korea’s SK Group, the news agency says.
Without ever leaving the comfort of his Beverly Hills home in Los Angeles, Andrew Left has become the scourge of companies based halfway around the world in China. Mr Left, 40, does not understand Chinese and has not been in China for more than a decade. Over the past five years, however, he has prepared research reports on at least 18 Chinese companies that trade publicly in the US, alleging fraud, accounting irregularities and disclosure violations. Since each report was posted, the stock prices of 14 of those 18 companies have fallen 50 to 100 per cent, says the FT. Mr Left’s strategy is similar to that of Carson Block, the short seller who devastated Sino-Forest’s value with a damning report extensively covered by FT Alphaville.
The Globe & Mail continued its coverage of the Sino-Forest story by sharing a few beers and a Cobb salad with Carson Block.
In a “dude”-laced interview with Andy Hoffman published Saturday, Block reiterates his belief that Sino-Forest is a “fraud”. Read more
The price action in Shanghai-based, Nasdaq-listed Spreadtrum Communications on Tuesday afternoon.
Via Google Finance: Read more
It’s Tuesday — Sino-Forest results day.
The Chinese forestry firm already stands accused of being a “stratospheric” fraud by research and short-selling outfit Muddy Waters. Today Sino-Forest is set to offer a deeper look at its finances with Q1 results. Read more
In the previous post we tried to identify Muddy Waters’ (MW) main allegations concerning Sino-Forest Corporation’s (TRE) assets in Yunnan province, China.
This post looks at TRE’s response and makes some new information publicly available. Read more
At pixel time Sino-Forest Corporation’s (TRE) was trading at C$4.72, below even Friday’s lows, on the back of continued scrutiny and Moody’s’ announcement it was putting TRE’s bonds on review for a downgrade.
The timber company, which research house and short seller Muddy Waters (MW) alleges is a “fraud”, released a statement on Monday rebutting claims it has misled investors about its finances. Read more