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Latest Alleged Chinese Fraud: PUDA Coal (NYSE: PUDA) - $2.66 Price Target, 70% Downside, By Alfred Little

Tyler Durden's picture




 

Notorious contrarian Alfred Little, who recently made a splash in the alleged Chinese fraud basket, by issuing a scathing report against Deer Consumer Products (Nasdaq: DEER) which has since cut the price of the stock in half, yet gotten the author in hot trouble with the company which decided to sue both him and Seeking Alpha which hosted the report (even as shareholders of DEER should be thanking him for issuing the report when the stock was still at $11) is out with his latest report, taking on the next in a seemingly endless sequence of potential frauds (check the Nasdaq halt list and find the most recurring word): Puda Coal, Inc (NYSE: PUDA). Cutting to the chase: "Considering the 2009 and 2010 audited financials can no longer be relied upon, and  more importantly the complete lack of internal control that allowed Chairman Zhao to first steal the company, then sell half the company (pocketing the proceeds) and then pledge the other half of the company to a Chinese PE fund while piling on $530.3 million of 14.5% debt, I strongly believe $2.66 is the most this stock is worth today." Those buying puts are cautioned that the stock may halt and never reopen. Place your bets appropriately.

Puda Coal Final Report

 

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Fri, 04/08/2011 - 10:10 | 1149657 eigenvalue
eigenvalue's picture

I also highly suspect another Chinese company called Spreadtrum Communications, Inc (NASDAQ: SPRD) is a fraud. Its stock price and EPS are unbelievably strong. However, I don't have a deep enough pocket to do a thorough investigation.:(

Fri, 04/08/2011 - 10:19 | 1149700 A Man without Q...
A Man without Qualities's picture

I highly suspect that a company called Bank of America is a fraud, but if we ever got definitive proof, they would simply change the definition of fraud or give exemptions to any company with the word America in it's name...

Fri, 04/08/2011 - 11:15 | 1149942 Fish Gone Bad
Fish Gone Bad's picture

Maybe Puda's name should really be Puta.

Fri, 04/08/2011 - 20:32 | 1152195 drwells
drwells's picture

+1

Wed, 08/17/2011 - 04:04 | 1568132 shanelee
shanelee's picture

Wow, this was a top quality post. In theory I'd like to write like this too, taking time and real effort to make a good article.

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Fri, 04/08/2011 - 10:16 | 1149679 Great Unwashed
Great Unwashed's picture

Finding and shorting Chinese frauds is turning into a nice little cottage industry. Soon everybody is going to be looking for their own.

Fri, 04/08/2011 - 10:30 | 1149731 Monday1929
Monday1929's picture

The fraud in China is unforeseeable.

Fri, 04/08/2011 - 11:14 | 1149948 Fish Gone Bad
Fish Gone Bad's picture

+1.  That is a scream!

Fri, 04/08/2011 - 12:17 | 1150234 curbyourrisk
curbyourrisk's picture

The Fraud in China...is China.

Fri, 04/08/2011 - 23:53 | 1152725 thames222
thames222's picture

I F'ing hate the Chinese, who couldn't have seen this coming?  Only Durden would have the leak like this though, good job Z-Hedge guys! www.forecastfortomorrow.com

Fri, 04/08/2011 - 10:37 | 1149766 Global Hunter
Global Hunter's picture

If a letter writer or website publishes a negative report on a company I am director, management or executive of and believe in and the stock gets cut in half I'm laughing my arse off and loading up the truck in my PA, "thank you very much".  So to sue somebody for having an opinion is really all you need to know.

Fri, 04/08/2011 - 11:02 | 1149881 tallen
tallen's picture

Another stock I've been looking into is HRBN, valued at $600M, it claims it can double its revenue every year. (It's got a 8PE, what a joke). Numerous dodgy insider actions. Read into the company.

Thanks again zerohedge, bought a load of puts at 7, 1 week expiration. Up double so far :)

Fri, 04/08/2011 - 11:29 | 1150019 Victor Berry
Victor Berry's picture

How can fraudulent Chinese companies fool the Wall Street whiz kids for so long?  And does anybody really think accounting fraud is isolated to Chinese companies?

Fri, 04/08/2011 - 11:49 | 1150113 babylon15
babylon15's picture

Can you explain the mechanism for exactly what happens if you buy a put with a strike of $10.00 and the stock never reopens?

Fri, 04/08/2011 - 14:12 | 1150714 arthur darrell
arthur darrell's picture

You can always exercise your PUT and dont need a locate. The fully paid put option is a contract and you will only be subject to buy in when or if the shares reopen. Pink sheets count. So buy puts without the ZH error.

Fri, 04/08/2011 - 12:00 | 1150147 g3h
g3h's picture

ZH,

Have a complete list of the Chinese fraud stocks you have reported?

Can't seem to find them all easily.

Fri, 04/08/2011 - 12:15 | 1150216 buzzsaw99
buzzsaw99's picture

...that allowed Chairman Zhao to first steal the company, then sell half the company (pocketing the proceeds) and then pledge the other half of the company to a Chinese PE fund while piling on $530.3 million of 14.5% debt...

 

They learn fast.

Fri, 04/08/2011 - 12:16 | 1150223 buzzsaw99
buzzsaw99's picture

Replace "Chairman Zhao" with "the Waltons", "the Gates", "the Schmidts", and that is exactly how things work here.

Fri, 04/08/2011 - 21:24 | 1152343 tomster0126
tomster0126's picture

Definitely not playing around with any Chinese stocks again...sheisty, very very sheisty indeed.

 

www.forecastfortomorrow.com

Sat, 05/21/2011 - 02:41 | 1297755 jimmight
jimmight's picture

Definitely not playing around with any Chinese stocks again...sheisty, very very sheisty indeed.

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Thu, 07/07/2011 - 05:33 | 1431895 shanelee
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