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RINO's Stock Price Plunges Into Muddy Waters As Research Report Claims Stock Is Scam
Before CSCO defecated the bed, today's most notable downside mover in the market was RINO International, a relatively recent addition to the US stock market, which in the past 2 years has gone from over $50 to $2, and recently was trading $15.66, until small research company Muddy Waters Research came out with a 30-page brutalizing report this morning, which once it made the rounds, sent the stock into a tailspin, closing down 15%. In a nutshell, Muddy Waters believes the company is a dud, and has initiated the company with a Strong Sell and a $2.45 price target (likely backed by a solid short position, but hey: if they are right, they deserve to make money). And cursory view indicates Muddy may actually be generous in their PT. The research company notes: "[RINO] reported 2009 revenue of $193 million. In reality its revenue is under $15 million, and its management has diverted tens of millions of dollars for its own use. We value RINO based on the cash we believe remains in the company after the most recent raise." After reading the report, we tend to agree that report author Carson Block may be on to something, and that this stock has a very material probability of dropping another 80% over the next several weeks or months as the downside case gathers momentum.
The report's highlights:
- RINO’s FGD sales (60% to 75% of revenue) are much lower than it
claims. We found that many of its customer relationships do not exist. - Chinese regulatory filings show that RINO’s consolidated 2009
revenue was only $11 million, or 94.2% lower than it reported in the US.
We show that the Chinese numbers are credible. - RINO’s accounting has serious flaws that are clear signs of cooked books.
- RINO’s management is draining cash from the company for its own
business and personal uses. The management is in flagrant breach of its
VIE agreements, which require it to pay income to RINO (as opposed to
taking it). - RINO’s balance sheet has an astonishingly small amount of tangible
assets for a manufacturer. Rather, it is filled with low quality “paper”
assets that balance out the inflated earnings, and likely hide leakage. - RINO is not the industry leader it claims to be in the steel sinter
FGD system market. Rather, it is an obscure company in a crowded field,
and is best known for its failed projects. Its reported margins are
two to three times what they really are. Its technology is sub-par. - We are not sanguine about management “borrowing” $3.2 million to
purchase a luxury home in Orange County, CA the day that RINO closed its
$100.0 million financing.
Full report (pdf):
Hopefully unlike the SPY and IWM, this is not a stock that ends up being on the daily HTB list.
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That stock already has a huge 43% of the float short.
Stock has 7.29 million shares in the float.. yet trades an avarage of 700k shares a day?
This is HFT wet dream churned out loonacy of what market has become.
That stock already has a huge 43% of the float short.
I wonder how many of those shorts belong to RINO's management...
Those that don't, belong to GS.
And who said the Chinese don't innovate. Its their own little Bre-X!
In other news, the G20 continues to completely skirt the real issues facing the world, namely that all countries have decided to devalue their currencies together. Inflate the elite's debt away, and then bring in a new fiat when it all comes crashing down...
http://psychonews.site90.net
And they have like no financial interest at all in issuing a 'brutal' sell-side report after taking up a solid short position, right?
*wink*
"I went down to The Crossroads, fell down on my knees. Asked the Lord above for mercy--save me if you please. You can run you can run. tell my friend-boy Willie Brown. You can run you can run. Tell my friend-boy Willie Brown. And I'm standing at the Crossroads--believe I'm sinking down."
That's actually Robert Johnson but there's just no way I can be satisfied!
"Got my mojo working, but it just don't work on you!"
when are banksters going to start shooting each other??
This would describe pretty much every corporate management team in America. Probably better to add that RINO's revenues are not sufficient to sustain management's graft.
~Cursive
good evening, cursive. welcome back.
No more posting during the day since I've gotten the new job. :( But I am enjoying the work and that new mortgage, thanks to your input. :)
My pleasure - nice to see you back in the mix.
Good point, but I believe we can make it even terser.
"This would describe America."
it is the world.
Can Muddy Waters research GLD and SLV. Please!
I can not really comment on exactly where the money came from, but the CEO of RINO also purchased this Coto de Caza property for $5,300,000 at the same time he purchased the other Coto property for $3,200,000.
http://www.cotohousingblog.com/?p=5346
It will be interesting to watch how this stock actually falls. If all the shorts are a big player, then the stock falls straight down. If there are a lot of little guys, then it will shoot down, and then shoot up (and squeeze out the weak hands), and then drop off.
I could never invest in RINO. I'm too Libertarian.
Not to muddy the waters or anything, but I think Muddy Waters,LLC has less of a pedigree
than RINO International. I think MW was established this year. Has 2 disaffected principals,
only other business this year was putting hit on Orient Paper in June.
Full Disclosure: No position in Orient Paper, am not a RINO.
These guys! are MW. http://propaganda.upclo.se/mw.png . They can has research! For real! ( http://www.muddywatersresearch.com ) Besides the obvious question about what the hell the guy in the front is doing with his hand on the macbook, the obvious reality is that MW is engaging in market manipulation. For more on MW's past unsubstantiated hits on companies in china see: http://seekingalpha.com/article/219172-orient-paper-and-the-unfortunate-... . Sorry Tyler this 'news' is not worthy of ZH.
PRC bot-shills showing up on Zerohedge this morning to defend RINO. Interesting.
EURO daily chart bearish warnings continue.
US Dollar daily chart bullish warnings continue.
http://stockmarket618.wordpress.com
I think we just put in our low on the SPY, this morning, pre-market.
Muddy Waters believes the company is a dud, and has initiated the company with a Strong Sell and a $2.45 price target (likely backed by a solid short position, but hey: if they are right, they deserve to make money).
So true, Tyler. The SEC's bounty program is a total sham. If you find fraud, go public and short the living shit out of the stock. The SEC will never reward (or even thank you) for reporting fraud.
People like Muddy do run the risk of being charged themselves, but the nose-pickers at the SEC are so lazy, discredited and disorganized, no one should take anything about them seriously.
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