Muddy Waters released their latest short selling piece on FSIN. Interesting that 2 hours after the release the name popped up to $7.4 from its opening price of $5.8. Unless someone is covering, kind of counterintuitive. People brushing off the most recent Block thesis? Video below on FSIN. WSO's take?
Muddy Waters - Narrated Frauducation on Fraud School, RINO, FSIN from Muddy Waters on Vimeo.
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Short squeeze
Looks like the stock took the dip following the April 3 article cited by MW.
I watched the presentation and didn't find it overly convincing. I'm pretty skeptical of these guys with huge short positions coming out with fraud claims, even if they have hit the mark a few times. When you make your living exposing fraud, eventually you are going to run out of fraud to expose.
Eh, not really. For one, they only need a few winners a year in a concentrated portfolio. Secondly, this is China, it's the fraud capital of the world. Thirdly, there are plenty of bullshit companies in the US to short as well -- "fraud" might be too strong of a word in some cases -- but there are plenty of high multiple stocks that need to get kicked in the jimmy.
Assuming they already have short positions in these companies, I don't think it is fair to come out with these reports that crush the stock price with there being only a chance of actual fraud. At worst it's libel and at best it's market manipulation.
Compared to say Einhorn's presentation on GMCR? I agree it's a bit of a gray area, but there's a decent history of investment firms (and individuals) releasing information and analyses on their holdings to the public. Look at virtually any post on Seeking Alpha. Look at Pershing on basically every holding they have. If they're observing certain blackout periods around it and disclosing the position (Muddy Waters is actually pretty bad at this), releasing analyses on the holding doesn't seem off limits.
But why do you consider this libelous? On the face of it, their points seem reasonably well researched and they toss in some on the ground diligence with it. Do you have a specific reason to disagree with their argument aside from the belief that you run out of corporate frauds over time?
Is it libel if everything they say is correct? I'm not a lawyer, but I don't think so. The fact is these companies should be providing more transparency to their owners anyway (firms like Muddy Waters shouldn't even have a viable business model, in other words, because firms "should" be doing the right thing and disclosing more information). Muddy Waters and others are providing a valuable service to the market by outing fraudsters, and if they get paid for it in the process, I'm okay with that as long as what they are saying is accurate.
i dont understand how it could be libel. Its a short thesis. They are doing their work and presenting a case on why they THINK the company might be fraudulent. Just like any other investment thesis right?
Wouldyou have the same opinion if they were recommending the purchase of shares of FSIN? If so, then you believe no investor should every disclose his thesis?
I think there is a difference between claiming fraud and claiming a company will miss earnings.
What's the difference? If you're right you're right.
I don't see a difference between claiming a company is a fraud when it isn't and claiming a company is the next AAPL when it isn't.
I believe the push-back you're seeing on here is because your comments come off as anti-short selling.
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