A word from the guys who are shorting Chinese reverse mergers
By Alexandra Stevenson
Shorters of overseas-listed Chinese stocks are coming out of the woodwork and they’re more shameless than ever. At an event in Bevery Hills devoted entirely to reverse mergers, a group of short sellers – many of whom are producing research alleging Chinese companies are fraudulent, and then taking positions against them to profit from share price falls – grabbed the chance to broadcast their success.
“This is harvest time for our side. If you don’t see a bunch of really wealthy guys up here, you’re not looking close,” one investor said, according to Reuters.
That investor was John Bird, who has been especially vocal about his short positions. “This has been making more money than you can imagine.”
But not everyone at the conference was pleased about the recent deluge of US-listed Chinese companies who have had to announced SEC investigations and/or have had their trading halted by US exchanges, Reuters reports.
Speaking about short sellers like Andrew Left, the man behind Citron Research, and Carson Block of Muddy Waters (who is currently hammering on about Sino Forest), one attendee from DLA Piper’s Securities Litigation practice was quoted by Reuters:
“What it comes down to is, is the information truthful and accurate? And, also, do you have an economic motive or an opportunity…”
One investor in Sino Forest – the most recent Chinese reverse merger to come under scrutiny of Muddy Waters – recently commented to beyondbrics that, as an emerging-market company, Sino Forest was already viewed with greater scepticism than developed-market ones. “As such, people don’t have much confidence.”
Sino Forest has shed C$5.39bn in market cap since mid March, leaving some investors to wonder how much more it can lose.
If you asked Left, the answer would presumably be similar to his broader sentiment expressed at the conference: “Chinese RTOs, rest in peace. What’s next?”
Shorters of overseas-listed Chinese stocks are coming out of the woodwork and they’re more shameless than ever. At an event in Bevery Hills devoted entirely to reverse mergers, a group of short sellers – many of whom are producing research alleging Chinese companies are fraudulent, and then taking positions against them to profit from share price falls – grabbed the chance to broadcast their success.
“This is harvest time for our side. If you don’t see a bunch of really wealthy guys up here, you’re not looking close,” one investor said, according to Reuters.
That investor was John Bird, who has been especially vocal about his short positions. “This has been making more money than you can imagine.”
But not everyone at the conference was pleased about the recent deluge of US-listed Chinese companies who have had to announced SEC investigations and/or have had their trading halted by US exchanges, Reuters reports.
Speaking about short sellers like Andrew Left, the man behind Citron Research, and Carson Block of Muddy Waters (who is currently hammering on about Sino Forest), one attendee from DLA Piper’s Securities Litigation practice was quoted by Reuters:
“What it comes down to is, is the information truthful and accurate? And, also, do you have an economic motive or an opportunity…”
One investor in Sino Forest – the most recent Chinese reverse merger to come under scrutiny of Muddy Waters – recently commented to beyondbrics that, as an emerging-market company, Sino Forest was already viewed with greater scepticism than developed-market ones. “As such, people don’t have much confidence.”
Sino Forest has shed C$5.39bn in market cap since mid March, leaving some investors to wonder how much more it can lose.
If you asked Left, the answer would presumably be similar to his broader sentiment expressed at the conference: “Chinese RTOs, rest in peace. What’s next?”
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