Does Muddy Waters take positions before its calls ?

[m22au]

Quote from trade2live:

If they acqured such a large following that each time they issue a report, there is a significant move in the stock, the SEC should establish rules in the way these reports/opinions are issued. ...
I don't think that any one analyst should have that kind of power especially if they take a position as well.

How to you decide to whom the rule applies and who it does not? What specific criteria do you use when deciding who is captured by this hypothetical rule? And then suppose your arbitrary rule is enacted, what is stopping Carson Block from just disbanding Muddy Waters and setting up a new firm (not captured by the rules) called "Really Murky Waters"?

Quote from trade2live:

A HF would get into serious trouble if they did was MW was doing, seems like MW is a research firm so they are not scrutinized as much.

Exactly what law or SEC rule would be broken if a hedge fund released a report about a stock they own (or short)?

Quote from trade2live:

And it's the same to some extent for Ackman, Icahn etc (although I didn't follow the Icahn Apple thing) I have always thought it was very lame for someone to talk their book and especially for a HF manager to pump his positions with the help of Maria Bartiromo, and the SEC should issue strict rules as to how this is done.

If they've disclosed their position (like Muddy Waters have), what's wrong with Ackman or Icahn talking their book?

Again, if SEC "should issue strict rules as to how this is done",
how to you decide to whom the rule applies and who it does not? What specific criteria do you use when deciding who is captured by this hypothetical rule?

 

[zdreg]

Quote from trade2live:

If they acqured such a large following that each time they issue a report, there is a significant move in the stock, the SEC should establish rules in the way these reports/opinions are issued.
When you see the move in NQ, I don't think that is acceptable if you want a market trusted by investors. Their report might be accurate and all, but they have such an impact that everybody starts selling and probably HFT massively so, literally obliterating the stock. I don't think that any one analyst should have that kind of power especially if they take a position as well. A HF would get into serious trouble if they did was MW was doing, seems like MW is a research firm so they are not scrutinized as much.

And it's the same to some extent for Ackman, Icahn etc (although I didn't follow the Icahn Apple thing) I have always thought it was very lame for someone to talk their book and especially for a HF manager to pump his positions with the help of Maria Bartiromo, and the SEC should issue strict rules as to how this is done.

everybody discloses whether they have a position or not, including the hedge fund on maria batiromo. if you think there is such an effect, instead of griping make money off it.

"Their report might be accurate and all, but they have such an impact that everybody starts selling and probably HFT massively so,

people who can't trade profitably always find a bogeyman. in your case it is hft traders.

 

[stock777]

Quote from FCXoptions:

I stand corrected, I was confusing the two.

I always confuse the two, same racket.

 

[d08]

http://seekingalpha.com/article/178...d-waters-means-a-short-squeeze-on-the-horizon

Looks like I was right. The huge short positions/puts on NQ in days leading to the 'report' really speak volumes. Funny that m22au calls it 'investment research', I say Block knew exactly what kind of effect this report would have on the stock and how little the report has got do with truth or 'investment research'. I skimmed through the MW paper and it was easy to tell that it was simply too perfect, clearly engineered not to leave any doubt to what the investor reading it would do. The article also points out clear errors in MW 'reporting', knowing how they specialize in Chinese stocks, they would've known the fact about L2 funds. This can only lead to the conclusion that they mislead on purpose.

And yes, I have an issue of how Ackman, Einhorn and Icahn conduct business. Most here don't have a problem with thugs but I do.

 

[m22au]

Quote from d08:

http://seekingalpha.com/article/178...d-waters-means-a-short-squeeze-on-the-horizon

Looks like I was right. The huge short positions/puts on NQ in days leading to the 'report' really speak volumes. Funny that m22au calls it 'investment research', I say Block knew exactly what kind of effect this report would have on the stock and how little the report has got do with truth or 'investment research'. I skimmed through the MW paper and it was easy to tell that it was simply too perfect, clearly engineered not to leave any doubt to what the investor reading it would do. The article also points out clear errors in MW 'reporting', knowing how they specialize in Chinese stocks, they would've known the fact about L2 funds. This can only lead to the conclusion that they mislead on purpose.

And yes, I have an issue of how Ackman, Einhorn and Icahn conduct business. Most here don't have a problem with thugs but I do.

We can agree to disagree about the validity of "talking one's book" either in spoken or written form. If that is the case, are comfortable with Seeking Alpha author "Velocity Trading" publishing their research, given the disclosed long position in NQ?
How is that any different to Muddy Waters publishing their research? Is it OK for Goldbaum Research to publish a bearish report on NQ?

Your conclusion that Muddy Waters mislead on purpose is wrong: Muddy Waters believe it's an issue; whereas NQ do not.

Others (http://blogs.barrons.com/emergingma...level-2-asset-is-not-common-chinese-practice/) are dubious about NQ's explanation of 100% of their cash being classified as level 2.

In any case, Muddy Waters' report need not be 100% accurate to be of merit. If they are wrong about one aspect of the report, this does not automatically disprove other assertions they make.

 

[d08]

Quote from m22au:

In any case, Muddy Waters' report need not be 100% accurate to be of merit. If they are wrong about one aspect of the report, this does not automatically disprove other assertions they make.

So they're throwing darts and sometimes are right. It's not like MW took a small position and published some research, they went all-in with shorts and did everything to sink the stock, that's their modus operandi.

There's a huge difference in saying "we believe NQ is overvalued and their future market share will decline considerably" and "they're all liars and scammers, it's all a big fraud!", especially when it's not true.

There's a reason why these manipulation methods are applied to Chinese stocks (all of MW) and those registered to the Caribbean heavens (Herbalife), doing it to an American company with significant financial ammunition risks a destructive lawsuit.

What you don't see is, Muddy Waters guys are playing their own dirty game and they're not in the least interested in the truth or investigating.

 

[m22au]

Quote from d08:
So they're throwing darts and sometimes are right. It's not like MW took a small position and published some research, they went all-in with shorts and did everything to sink the stock, that's their modus operandi.

There's a huge difference in saying "we believe NQ is overvalued and their future market share will decline considerably" and "they're all liars and scammers, it's all a big fraud!", especially when it's not true.

I agree that their entire report may not be accurate.

Their main thesis is not "their future market share will decline considerably". It is that they have serious concerns about the company's financial statements and company's announcements.

Are you saying that the entire report is untrue? To use just one example, do you think their reporting of the conversation with Alipay is a work of fiction? If that's what you think, that's fine, but given their track record of uncovering other frauds, the stock's decline suggests that most people believe at least part of their claims.

Quote from d08:
There's a reason why these manipulation methods are applied to Chinese stocks (all of MW) and those registered to the Caribbean heavens (Herbalife), doing it to an American company with significant financial ammunition risks a destructive lawsuit.

What exactly would be the contention of such a lawsuit against Muddy Waters? That an investor was unhappy MW released a negative report on the company?
Regardless, I don't see how the domicile of the target company affects their ability to commence a baseless lawsuit.

Quote from d08:
What you don't see is, Muddy Waters guys are playing their own dirty game and they're not in the least interested in the truth or investigating.

Of course they're interested in trading gains. But as a secondary concern, they're also interested in uncovering frauds. They have a successful track record of doing just that:
http://www.muddywatersresearch.com/track-record/

 

[d08]

Quote from m22au:

Of course they're interested in trading gains. But as a secondary concern, they're also interested in uncovering frauds. They have a successful track record of doing just that:
http://www.muddywatersresearch.com/track-record/

Successful track record? They managed to ruin the reputation of FMCN and nothing else. The markets move on gossip and if you have these guys spewing lies to drive down prices, of course you rather privatize.
So where's NQ on that list, I'm sure they made millions with that fabricated "report" - 'oops, our bad'. They don't care if these companies are frauds or not, if they had the muscle then they'd generate a report on GE but obviously they don't.

 

[m22au]

Successful track record? They managed to ruin the reputation of FMCN and nothing else. The markets move on gossip and if you have these guys spewing lies to drive down prices, of course you rather privatize.
So where's NQ on that list, I'm sure they made millions with that fabricated "report" - 'oops, our bad'. They don't care if these companies are frauds or not, if they had the muscle then they'd generate a report on GE but obviously they don't.

The problem is that GE is most likely a legitimate company with no fraud. Whereas NQ Mobile has trouble filing its 20-F in a timely manner.
http://ir.nq.com/phoenix.zhtml?c=243152&p=irol-newsArticle&ID=1931386&highlight=

 

[stock777]

mw is in it as a public service.

just like sykes, lucci, the rest.