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TRE - Sino-forest put.


alertmeipp

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As for Carson Block and his Muddy Waters organization.  Does it not seem a little sleazy to put out a research report on a company you hold to drive down the stock price? 

 

My question regarding him is this:  Did he sell his short positions today or is he still in it?  If he has stayed in it he has conviction and is giving management time to prove him wrong.  If he just drove it down to make a quick buck then he is in for a SAC type future with lawsuits and investigations wiithout the protection and capital base of SAC.

 

It all comes down to the quality and integrity of his research.  If he's correct, there is absolutely nothing sleazy about it.  Do you think it's sleazy of Whitney Tilson and T2 to put out powerpoint after powerpoint touting BRK.A and MSFT?

 

I know folks on this board dislike short sellers from the FFH days, but who else will effectively police the frauds in the securities markets?  The last couple of years of China research was very eye opening for me.  I had not been to China until last year.

 

I recommend the book "Mr. China" by Clissold as a classic for anyone thinking about investing in or doing business with China-based companies.

You are of course correct short and distort is no worse than pump and dump talking your book is a tried and true method of inflluencing market prices and clearly effective or why would managers do it. Promoting  worthless investments is a game that is practiced very profitably in Vancouver the city I live in and I have no dog in this fight re Sino but FFh was almost destroyed by these bandits and what they do sure looks like securities manipulation to me.
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I have learned through the school of hard knocks to avoid options on the Canadian exchange like the plague and Alertmeipp just confirms my bias.  Once into a position you are essentially stuck until the exercise date.  No offense Alert - I have been down this road with Celestica and still hold some MFC options that I cannot get rid of.

 

I hold options on RIMM via the US.

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Trading Halt is still in place.  My guess is that no news is very bad news.  I cant imagine that Chinese authorities are going to appreciate this very much. 

 

BTW:  I am not returning my profits.  :P.  I will donate the money for the greater good when I can afford it.

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Guest broxburnboy

Canaccord's take:  from Morning Coffee newsletter

 

Sino Forest* (TRE : TSX : $14.46), Net Change: -3.75, % Change: -20.59%, Volume: 11,076,288

Muddying the Waters...Shares of Sino Forest were halted after the company’s share price plummeted 20% in a matter of

minutes. The company’s share price has been under pressure for several weeks as rumours that the shares were being heavily

shorted floated around the market. Adding fuel to the fire was a fresh report by a noted short-selling research firm, calling the

company a fraud, invoking the ghosts of Bernie Madoff and referring to Sino Forest as a classic “Canadian resource pump and

dump.” The report was published by a firm that has a history of publishing aggressive and extremely negative reports on

Chinese companies. Last week, Sino Forest released a report from Poyry Consulting that estimated the value of their timber

holdings at US$3.1 billion. As of 2010 the company had 788,700 hectares under management, with the market seeing additional

value from future replanting and potential acquisitions. In a recent report, a Bay Street analyst valued the company’s timber

holding at $4.6 billion and believed that the Poyry valuation used an unrealistically long time-frame of 10 years to harvest the

wood, therefore penalizing the valuation of the company. Let the battle between the longs and the shorts commence!

 

 

 

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Muddy Waters does great, great work. Much better than pretty much any research out there. I should also note that no company to my knowledge has been able to remain intact after an attack by Muddy Waters. They do their research, and they do it very well.

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I read the release. This is pretty much the same type of response that ONP put out after MW released their report, specifically with statements like "MW never contacted us to confirm their figures", "Who is Muddy Waters anyways?", "we are hiring third party legal and accounting firms to review and confirm our numbers" etc etc.

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I wouldn't put much credibility in a press release.  What were they supposed to say? 

 

"You got us!  We're a fraud!  We'd like to be executed now, please."

 

In regards to Muddy Waters, they have been spot on in their past reports.  I'd read their report before you are quick to call them out on manipulation.  It's too bad more analysts don't take the time to understand these companies like they have, billions could have been saved.

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I have seen this horse and pony show before.  Build up a big short position in the company...then kill it with bad reports (a la FFH)

 

Muddy waters might have made some calls proir, or said they did anyway.  But lets be honest, they dont have a mailing address...they operate out of china, they are no registered in any SEC or OSEC as anything.  They are as opaque as can be.  The only thing I know about them is they took a short position prior to providing a negative report.  That doesnt do me any favours.

 

All I know is I am making a killing on the way up now, as I bought at open.

 

The company is trading at cash value at the 4.90/5.00 mark.

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I wouldn't put much credibility in a press release.  What were they supposed to say? 

 

"You got us!   We're a fraud!   We'd like to be executed now, please."

 

In regards to Muddy Waters, they have been spot on in their past reports.   I'd read their report before you are quick to call them out on manipulation.   It's too bad more analysts don't take the time to understand these companies like they have, billions could have been saved.

 

Well, they did point out couple examples where the report is incorrect. And that couple pts are not small ones.

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There is nothing hypothetical about MW track record.  They have been spot on numerous times in the past, releasing reports on their website (RINO, CCME) and then the companies were shortly after proven to be frauds. 

 

I find nothing immoral or disingenuous about what they do.  You know they are short when they release their report.  Their reports have almost entirely proven to be true in every case thus far. 

 

RE: The cash balance, I would be very, very, careful here.  The report is damning and if even a fraction of it is true the company is probably worthless.  Fraud is fraud is fraud.  You can't trust the cash balances. 

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first impression of mr block is a good one!

 

regards

rijk

 

http://video.cnbc.com/gallery/?video=3000016286

 

LOL... just one video got you. Anyways, took the hit and bot back some puts. I hated the spread and liquidity with the puts in this kind of situation. I may as well go straight long. Half of my gain this year is gone so far on this stupid idea. Dang it.

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To add to what given2invest has already said, while I understand the obvious connection some have made to the roller-coaster that was Fairfax vs. the shorts, viewing Chinese RTOs under the same lens you used for a reputable local company (Fairfax) is a dangerous, dangerous idea.

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Maybe I am a natural skeptic...but this seems fishy.

 

An opaque company issues report on company after they short the heck out of it.  Claims no liability for the accuracy, timing etc etc....new board members come here and post how great they are (muddy waters)...when they are also members of the muddy waters forum..could be just a random coincidence.  

 

short and distort is the same as pump and dump (jim cramer).  

 

time will tell who is correct.  TRE paid for my weekend fun.

 

I just wounder if this could be FFH at 80 bucks or if it is Nortel at 10.

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rijk, That video is a real treat.  It's got all the usual suspects that were involved in the short and disort campaign at FFH:  Herb Greenberg, John Hempton.

 

Only missing SAC and Spiro (oh he's dead) for a complete set piece.  Now we add Mr. Block.

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http://www.muddywatersresearch.com/research/

 

They are basically batting 1000, depending on how you look at it.

 

CCME, RINO, DGW, total frauds/zeros.

 

ONP - disaster but still trading.

 

All these reports came out then auditors resigned/trading was halted.  They have serious credibility, hence why the stock is down so much.  Nobody is forcing people to sell because of a research report. 

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I was not refering to you given2invest.

 

plus, your getting your batting average from the batter, not the pitcher.

 

according to their website, they have only issues 4 plus research reports?  and they are giving them out for free?

 

Same characters as the fairfax situation and you dont know who staked this company.  Maybe they are legit...but maybe SAC capital funded them and their research. who knows...

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I was not refering to you given2invest.

 

plus, your getting your batting average from the batter, not the pitcher.

 

according to their website, they have only issues 4 plus research reports?  and they are giving them out for free?

 

Same characters as the fairfax situation and you dont know who staked this company.  Maybe they are legit...but maybe SAC capital funded them and their research. who knows...

 

They have only issued those reports.  Why is that so hard to believe?  I've been following them since they nailed RINO.  You think they've taken down reports that didn't work?  lol.  I can tell you unequivocally they have not because I've been following them. 

 

Look, the market is telling you all you need to know about their legitimacy and the respect people have for them.  If you think it's just a "short attack", load up - you will make a fortune when it all settles.  This isn't a bank - a short report can't cause a run on it.  They have no need for new capital so the stock price is not going to put them out of business.  If all is well, it will rebound and then some.  I have no reason to believe anything except that Muddy Waters has been correct every time the have spotted and reported on a fraud and the report is unbelievably damning. 

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