I personally have never seen anything more outrageous than what Muddy Waters has been doing. Yes, it may serve the market as the research company exposes some of those companies that violates the trusts of their investors, however, what Block and his company has been doing has nothing to do with integrity or "exposing the dark". They are doing it for the money.
If that does not lead you to think about whether your support for this company is truly an act of honor, then perhaps all the financial professionals can recall something called "independence" and that a research company can never ever file a research report for or against a company in which it holds stakes. That is right. Nobody questions what Muddy Waters has been doing? Really? It violates the very foundation of research reports - impartiality. How would you feel if your lawyer is betting against you on the black market as he represents you in court? If you are an investor with the companies that Muddy Waters claim to be fraudulent, what would you do to protect your own interests? You Would Sell Your Shares, No Matter What!! That is exactly what Muddy Waters and Block have been doing - because they know that fear takes control of the market once their research report hits the market, even though their research is a pile of crap. Only Devil operates on fear.
Our ignorance, is what causes these people to continue reap huge amount of benefit at no costs.
A more recent story of Muddy Waters against Olam, the Singapore based company - Muddy Waters founder Block said that he is short selling Olam's stocks and will buy it at a low price. Wait a minute, if you believe the company is really fraudulent and is to be compared to Enron which went to bankrupcy, why would you want to buy back the shares when it hits the low end, Mr Block? I guess that exposed what you really think about this company! You knew the company is never meant to go to a low point without you faking your reports defaming it. And you plan on profiting from it.
The company Olam has 5.8 billion debt outstanding. It has more than 10 billion in liquidity. Liquidity! Asset is even more than that! You think a company that has 10 billion liquidity (172% of debt) can't pay off 5.8 billion debt? Do you know how much money the banks are required to hold in their safe against withdrawal of cash? You will be damned if you can find a number as high as 50%!
Nice try, Block. But as far as I know, the Singaporeans are smart. They have a world-class legal system that is known to be strict. You probably picked the wrong dance partner, boy!
