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Muddy Waters' Carson Block "I Am Not A Ninja Assassin"

Tyler Durden's picture




 

But as far as the credibility of at least one $30+ billion (?) hedge fund, he sure as hell is.

Courtesy of Bloomberg TV:

Block on whether he's as certain today as he was on June 2nd that Sino-Forest is a fraud:

"Yes.  Let me say two things.  Number one, it is Sino-Forest's management that participated in the fraud that has cost Paulson and investors all that money.  No. 2, yes, I'm just as certain today that the company is a fraud and the stock is zero as was on the day that we published." 

On whether he's discovered anything else about Sino-Forest that supports his allegations:

"We have continued to do work on it.  We have looked at it closely from an accounting perspective.  Some of the company's additional disclosures, in its attempt to defend itself against charges of fraud, some of those have actually been helpful in furthering our analysis.  I am not sure to what extent we will make this public.  We certainly do intend to communicate with both PwC, which is advising the special committee, and Ernst & Young and the regulators." 

On whether he is still short the stock:

"Yes…We do not comment in specifics on the revenue model, but my personal money is on the short side of this, and has been with every short call that we have made."

On S&P downgrading Sino-Forest bonds because of Muddy Waters' research: 

"I'd think that it's a bit of a cop out on the part of S&P.  We published this almost a month ago.  The company has had a microphone and a platform to respond. When it has opened its mouth, the company, the stocks and bonds have gone lower.  Rather than having anything confidence inspiring to say, they have continued to spook investors.  S&P may want to hang this on us, but I have a feeling that is really a cover for, at least in part, their own assessment that there are significant risks that are company specific not related to market perception and Muddy Waters." 

On his Spreadtrum call and criticism he's received:

"I am getting uncomfortable, actually, with this idea that we are ninja assassins that are going to take this stock price down a huge percentage within minutes or days.  What I would like to do to protect investors is that I would like to point out the issues and start a dialogue and get people thinking about these red flags before we come out with a report that sends the stock down 70%, 80%." 

"In the worst- case scenario, if Spreadtrum has fantastic answers and everything is the way it should be, and we misinterpreted these points as red flags, but the company transparency has improved, then the stock will go up." 

On how he thinks of himself if he's not a ninja assassin:

"I think of myself as someone protecting investors.  I have skill sets and experience that enables me to decode fraud in the China context and I am out there helping investors will stay away from these things before they throw more money at them." 

On whether he is planning to hire any full-time employees:

"I think it's a mischaracterization to say that I am a one-man show. We do have a team.  We operate differently than a traditional research house.  I've got a network of people who consult for Muddy Waters.  At present, the model works fine.  I suppose if we wanted to do something different or ramp up, we would need to take on head count.  It is really difficult to produce good, quality China research in volume.  You see that the banks struggle with this." 

 

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Thu, 06/30/2011 - 12:48 | 1415948 Freddie
Freddie's picture

Short them Chi Com fraud stocks bitchez!  Also FIRST!  YEah baby!

Thu, 06/30/2011 - 12:52 | 1415949 DoChenRollingBearing
DoChenRollingBearing's picture

Nice to have a Marshall in town.

Thu, 06/30/2011 - 13:50 | 1416180 topcallingtroll
topcallingtroll's picture

Word

Thu, 06/30/2011 - 13:56 | 1416206 carbonmutant
carbonmutant's picture

I think they're concerned he may be an frontier "Regulator"...

Fri, 07/01/2011 - 09:33 | 1418456 fx
fx's picture

A Marshall? are you kidding me? Making money off correct short calls is fine. But statingthat his intentions were also to protect investors is pure hypocrisy and simply ridiculous.

Thu, 06/30/2011 - 12:53 | 1415951 Godisanhftbot
Godisanhftbot's picture

  Said long ago this stock bashing game will turn ugly eventually. Too easy to manipulate the market.

 

 How many shorts just gave back all their SNOFF profits banging SPRD below 10?

Thu, 06/30/2011 - 13:00 | 1415980 SheepDog-One
SheepDog-One's picture

Oh so all the shorts obviously lost although its down 50%? 

Thu, 06/30/2011 - 13:01 | 1415984 pepperspray
pepperspray's picture

SPRD has been crazy to watch this week

Thu, 06/30/2011 - 12:50 | 1415956 101 years and c...
101 years and counting's picture

he should be put in jail for doing his due diligence!  how dare he question the status quo.

Thu, 06/30/2011 - 12:55 | 1415963 augie
augie's picture

Robin hood lives. 

Thu, 06/30/2011 - 12:55 | 1415973 Turkey
Turkey's picture

Holy spit a reasonable sounding smart guy.  Let's clone this fcker.

Thu, 06/30/2011 - 12:55 | 1415975 SheepDog-One
SheepDog-One's picture

What? Who is this ninja assasin, who reads reports and calls BS on scams? Outrageous!

Thu, 06/30/2011 - 13:15 | 1416057 I did it by Occident
I did it by Occident's picture

yes, he has mad ninja skills.

 

 

Thu, 06/30/2011 - 13:01 | 1415983 eurusdog
eurusdog's picture

Very good answers from someone that spends his time doing REAL research, on real issues. Paulson may not have enough money to hire guys like him in a few weeks. I wonder how much of Paulsons latest move out of financials was precipitated by clients faxing in redemption requests.

Thu, 06/30/2011 - 12:57 | 1415985 dwdollar
dwdollar's picture

Even if he is, so what.  It's refreshing to actually have one in an ocean of pump and dumpers.

Thu, 06/30/2011 - 13:00 | 1415992 firefighter302
firefighter302's picture

See no forrest... lol

Remember when Sen. Byron Dorgan was calling the CFO of Enron, Mr. Fast Dough?

And now we have B.O. as President.

O, the irony of it all.

 

Thu, 06/30/2011 - 13:11 | 1416019 A55H0LE_Lawyer
A55H0LE_Lawyer's picture

Of course, that is exactly what's you'd expect a ninja assassin to say.

 

Thu, 06/30/2011 - 13:10 | 1416034 augie
augie's picture

you're a prosecutor aren't you.

Thu, 06/30/2011 - 23:23 | 1417803 I did it by Occident
I did it by Occident's picture

Sun tzu say "All warfare is based on deception"

Thu, 06/30/2011 - 13:17 | 1416049 monopoly
monopoly's picture

What a breath of fresh air. Like it.

Thu, 06/30/2011 - 13:29 | 1416097 NotApplicable
NotApplicable's picture

Which is why he's been targeted. Nobody likes to be told that the emperor is naked.

Thu, 06/30/2011 - 13:26 | 1416085 bugs_
bugs_'s picture

i'm more of a cyberaccountant terminator

Thu, 06/30/2011 - 13:28 | 1416090 NotApplicable
NotApplicable's picture

How can you kill something that isn't alive?

Technically, the man is a zombie slayer.

Thu, 06/30/2011 - 13:36 | 1416148 dwdollar
dwdollar's picture

LOL...

Thu, 06/30/2011 - 13:32 | 1416129 Greeny
Greeny's picture

"In the worst- case scenario, if Spreadtrum has fantastic answers and everything is the way it should be, and we misinterpreted these points as red flags, but the company transparency has improved, then the stock will go up."

yeah, yeah, Cramer. It's up $2.50 since you said sell and

up 14% today and it's paying Div now.

Thu, 06/30/2011 - 13:40 | 1416149 slewie the pi-rat
slewie the pi-rat's picture

fraud?  this is shocking!

Thu, 06/30/2011 - 13:41 | 1416154 drivenZ
drivenZ's picture

yea really, what's the difference between what Block does and what every other bank does with their “to infinity and beyond” buy recommendations. Is it his fault people are taking notice of his research and hammering the stocks? No. good for him.  Hope he makes a billion dollars off guys like Paulson. 

Thu, 06/30/2011 - 14:29 | 1416337 blunderdog
blunderdog's picture

Block's telling the truth?

Thu, 06/30/2011 - 15:31 | 1416555 ThirdCoastSurfer
ThirdCoastSurfer's picture

Naked shorts were wrong but that is over. To short someone must lend you the shares. Then, the very fact that you have to buy back the shares you borrowed/shorted is a valuable downside protection/stopgap mechanism. 

Panicked investors willing to dump their stock at a whim are the real NINJa's (no income, no real job) investors. 

Thu, 06/30/2011 - 22:27 | 1417701 fellatio is not...
fellatio is not fattening's picture

I like that  NINJ  No Income No Job, I assume you did that intentionally, pretty damn shart, as opposed to a DINK  Double Income No Kids, take care.

Thu, 06/30/2011 - 15:27 | 1416557 Eireann go Brach
Eireann go Brach's picture

Who flung dung at Simo?

Thu, 06/30/2011 - 16:19 | 1416770 Marley
Marley's picture

That sure is the youngest looking Baby Boomer I've ever seen.

Thu, 06/30/2011 - 19:20 | 1417315 Saxxon
Saxxon's picture

I like this guy but he should watch his back if he is based in Hong Kong or anywhere else in the region for that matter.

Thu, 06/30/2011 - 21:51 | 1417588 Use of Weapons
Use of Weapons's picture

Shorting a market that holds $3 trillion [well, used to] of your debt, and is responsible for... ??65%?? of your export / import market [www.fas.org/sgp/crs/row/RL31403.pdf] and is solely responsible for allowing your country to function on debt...

Not ninja, more geopolitical play. "Carson Block" - "Muddy Waters". Do your diligence on where this guy came from, please. [Hint: Bill Block, WAB Capital, aka, doesn't have a $mil to invest of his own]. He's getting play from TPTB for points scoring, as a disposable asset. At this point in time, I'd treat him like a hot-potato; if you want a quick buck, analyse and jump on - medium term, a large fucking spanking is coming at him.

 

Doesn't mean you're not going to make money in the short term, but the medium / long term? This is a very short-sighted play (and note well - he's been wrong, and proved wrong when shorting home-spun companies).

 

 

tldr;

 

When he picks the wrong company (which he will), he'll die of an OD / car crash / jacuzzi accident pronto. I stand by my initial analysis (check it - first thread on this $multi-mil loss) stating this is a major investor having his hand slapped for going 'all in' with the French rather than anything else - if we all did due diligence, on all companies, the entire ponzi would crash immediately.

 

This is just perception filtering, and scoring points off mainland - more than likely, because of Euro support.

Fri, 07/01/2011 - 00:11 | 1417935 SparkySC
SparkySC's picture

Master Blaster run Barter-town

Fri, 07/01/2011 - 19:39 | 1420480 rcaldwell00
rcaldwell00's picture

Ninja assassin? This guy is an ass clown. Nice work on understanding the cash flow statement on a fabless semi conductor company, clearly his network didn't read a transcript or K when they put out tHis short report. If this dick covered down 35pct than he should go to jail.....this report was sloppy and thrown together and reeks of stock price manipulation. Sheriff, shareholder interest? Bullshit manipulator.....just like hft, hedge funds, institutions....thanks Carson I'll read my own goddamn financials...

Tue, 07/05/2011 - 22:29 | 1428491 DormRoom
DormRoom's picture

Carson Block was wrong about Sino Forest.  I heard Warren Buffet, and Berkshire Hathawaywas buying a stake in Sino Forest.  Apparently, they are using Morgan Stanley as their broker.

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