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Short selling
nipper
post Posted: Mar 28 2019, 11:13 AM
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weekly Short Report

https://www.sharecafe.com.au/2019/03/28/the-short-report-14/



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
blacksheep
post Posted: Mar 24 2019, 12:54 PM
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Short & distort? The ugly war between CEOs and activist critics
Lawrence Delevingne
QUOTE

The short war

The advent of social media and a bull market for stocks gave rise to a small but powerful group of activist short sellers. Companies tend to call attacks market manipulation, while the investors accuse them of trying to silence legitimate criticism. The new, ugly battles between the two camps are exemplified by Farmland Partners’ pursuit of anonymous short seller Rota Fortunae for a negative assessment of the company in July 2018.

QUOTE
Yet targeted businesses say many short campaigns waged this decade amount to “short and distort” schemes. They accuse some activists of spreading false or misleading information to drive a stock down and then quickly cash out, a mirror image of “pump and dump,” where unscrupulous investors promote speculative stocks before selling out at the top.

Cases against short sellers are rare, though, given free speech protections and companies hesitant to put themselves under the microscope of regulators, lawyers say.


read more - https://www.reuters.com/article/us-usa-stoc...s-idUSKCN1R20AW



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington

Said 'Thanks' for this post: triage  
 
blacksheep
post Posted: Feb 20 2019, 01:59 PM
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BaFin have stepped in and instituted a short selling ban - haven't seen that before.

General decree of the German Federal Financial Supervisory Authority ( BaFin ) prohibiting the establishment and increase of net short positions in shares of Wirecard AG

QUOTE
1. Facts

Currently, unfavorable events or developments have occurred that pose a serious threat to market confidence in Germany. For in recent days, massive uncertainties on the financial markets are detectable. The main reason for this was the price development of the share of Wirecard AG in recent weeks.

Wirecard AG is a global payment service company based in Germany. The shares of Wirecard AG are admitted to trading on the Frankfurt Stock Exchange and are part of the DAX . The DAX is the most important German stock index, reflecting the performance of the 30 largest and most actively traded German stocks. The shares of Wirecard AG were added to the DAX on 24.09.2018 . One subsidiary, Wirecard Bank AG , is a domestic CRR credit institution.

Wirecard AG offers its customers solutions for electronic payment transactions. It has connections to more than 200 international payment companies (banks, payment solutions, card networks). In addition, Wirecard AG has contracts with relevant credit card companies.

Domestic companies have been targeting so-called short attacks in the past, jeopardizing domestic market integrity and market confidence in fair and efficient pricing. Wirecard AG was also targeted by short-term attacks in 2008 and 2016, in which short sellers profited by taking corresponding positions, which led to corresponding price falls for Wirecard AG . This also resulted in investigations by BaFin and the law enforcement authorities, among other things due to market manipulation. The short attacks were accompanied and favored by negative media coverage.

Since the end of January 2019, various negative press reports have again been observed. In the past two weeks, the price of the Wirecard AG share fell sharply. Between 30.01.2019 and 15.02.2019, the price fell from 167.00 EUR (opening price on 30.01.2019) to 99.90 EUR (closing price on 15.02.2019), which means a 40 percent reduction in market capitalization. A significant fall in prices was observed after the publication of a press article claiming employees of a subsidiary of Wirecard AGIn Singapore, bookkeeping had simulated higher sales. The press reports coincide with increased net short selling positions (NLP) and associated strong volatility of Wirecard AG shares . From 01.02.2019 onwards, a significant increase in the NLP in shares of Wirecard AG can be observed, which has clearly strengthened again since 07.02.2019. Also in the last days the NLP has continued to increase significantly. The NLPs are held by various holders, in particular from abroad, even below the publication threshold.

The events described led to uncertainty in the market, in particular with regard to the reasonable price formation for the shares of Wirecard AG . In the current situation, there is a risk that market uncertainty will increase and expand into general market uncertainty.

https://www.bafin.de/SharedDocs/Veroeffentl...smassnahme.html

Wirecard: inside an accounting scandal
A preliminary report by a top law firm has unveiled a pattern of suspected book-padding across the group’s Asian operations
https://www.ft.com/content/d51a012e-1d6f-11...26-46fc3ad87c65

FT statement on Wirecard reporting
FEBRUARY 18, 2019
QUOTE
Any allegation against the FT or any of its reporters or staff of market manipulation or unethical reporting in relation to Wirecard is baseless and false. It is a smokescreen obscuring the serious allegations that were revealed by the FT.

Our reporters have been investigating this company for four years, and in the last month published stories based on credible evidence of fraudulent accounting detailed in internal documents seen by the FT. Wirecard's response was also reported. These articles have a significant public interest and are free to read on FT.com.

We have not been contacted by the German financial regulator or the Munich prosecutor. Any investigation would therefore appear to be at the very earliest stage, with investigators not yet having spoken to those they say they are investigating.

https://www.ft.com/content/d51a012e-1d6f-11...26-46fc3ad87c65



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Feb 5 2019, 12:23 PM
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There's a double standard applied to short sellers: Carson Block
Carson Block, founder and CIO of Muddy Waters Capital, joins BNN Bloomberg to discuss the role of short sellers amid calls for more regulatory scrutiny on investors engaging in the short side of a trade.
https://www.bnnbloomberg.ca/bloomberg-marke...-block~1601531#



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Jan 15 2019, 07:49 PM
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extract AFR article

QUOTE
John Hempton's Bronte Capital and Robert Luciano's VGI Partners posted returns of 20 and 17 per cent after fees in 2018, distinguishing themselves from the widespread pain inflicted upon hedge funds in the bonfire that was the December quarter.

Bronte's Amalthea fund returned 20.2 per cent in 2018, smashing its benchmark by successfully shorting "over-hyped and over-levered" stocks that propelled it through December's market destruction. VGI's master fund returned 16.9 per cent in Australian-dollar terms over the calendar year.

https://www.afr.com/markets/john-hemptons-b...20190115-h1a3a1



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington

Said 'Thanks' for this post: early birds  
 
blacksheep
post Posted: Dec 14 2018, 02:19 PM
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FRAUD, COCKROACHES AND BULLSHIT

Famed activist short seller Carson Block pulls no punches as he takes aim at Canada, Jack Ma and the U.S. pharmaceutical industry in this interview with Brian Price. Block, who serves as CIO of Muddy Waters Research, discusses the red flags he looks for when hunting for fraud, and reveals which companies are currently on his radar. Carson also touches on how his line of work has led to both tremendous success and death threats. Filmed December 4, 2018 in New York.

Watch the video below
https://www.realvision.com/spotting-fraud-c..._Carson%20Block



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington

Said 'Thanks' for this post: early birds  
 


blacksheep
post Posted: Dec 8 2018, 01:53 PM
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In Reply To: blacksheep's post @ Dec 7 2018, 08:27 PM

extract - Aphria fallout: 5 takeaways on the report that sent this cannabis stock plunging - https://mjbizdaily.com/aphria-cannabis-stock-plunging/
Published December 6, 2018 | By Lisa Bernard-Kuhn and Matt Lamers

QUOTE
But some of the concerns raised by the short-seller report could have broader implications for the rapidly growing cannabis industry, analysts and observers say.
“This could be the proverbial straw that breaks the camel’s back,” said Chris Damas, editor of BCMI Cannabis Report.

“The overvaluation case (for the Canadian licensed producers) could finally be resonating with investors, and it takes something like this to break down the floodgates.”

As the fallout evolves, here are five key takeaways for investors and cannabis operators to consider:

1. Not Aphria’s first red flag

This isn’t the initial harsh report issued by Hindenburg on Aphria.

In March, the firm released a report claiming it uncovered “rampant red flags” in its review of Aphria’s acquisition of Nuuvera for 826 million Canadian dollars ($669 million at that time).

The deal raised eyebrows among industry observers after it was reported Aphria’s chief financial officer and six directors owned shares of Nuuvera before the deal. Those details had not been previously disclosed to shareholders.

A month later, Aphria adopted new guidelines for its top leadership on investing in outside companies.

In the most recent report, the short sellers claim that Aphria overpaid for assets in the Caribbean and Latin America that were secretly controlled by “insiders” and are “largely worthless.”

The report’s researchers claim they performed “extensive on-the-ground” due diligence on recently acquired properties in Jamaica, Colombia and Argentina and found the deals to be “vastly inflated or outright fabrications.”

In one example, the report alleges that assets acquired in Jamaica for CA$145 million ($108 million) were “an abandoned building that was sold off by the bank earlier this year.”

Officials with Quintessential Capital Management and Hindenburg Research could not be reached for comment.

To the knowledge of Marijuana Business Daily, the claims detailed in the reports on Aphria have not been independently verified.

2. Bigger than Aphria

The accusations could have broader implications for the industry and call into question just how much due diligence occurs as cannabis companies embark on their rapid expansions, said Andrew Kessner, an analyst with New York-based investment advising firm William O’Neil.

“Things have been moving so quickly in this space that a lot of companies have gotten a pass as far as what they’ve been spending their money on and why,” he said. “I think investors are starting to wise up and ask, ‘What’s really under the hood?’

“Are these executives really being good stewards of investor capital or are they inflating their company’s position to bring up valuations and do another round of funding?”

Damas agreed.

“It’s this sort of thing that could be the crack in the dike – so to speak,” he said. “It’s going to have ramifications for the whole industry.

“Other people are going to start taking a look at those assets that are far and away and wonder if they’re really worth what management is paying.”

3. Reassessing international plays

Aphria’s stock selloff could also signal just how critically investors view the international footprints of Canada’s larger cannabis producers, Kessner said.

“These companies have used the Canadian (capital) markets as a launching pad to raise money based on their plans to grow internationally,” he said.

“If that growth story – of being a global player – gets shot down, then their valuation begins to make no sense.”

Analysts at both GMP Securities and Bank of Nova Scotia moved their ratings for Aphria to “under review” after the short-seller report.

“We believe that management’s credibility may have been impacted by the allegations raised in this report,” GMP analysts wrote in a note to investors. “It is unclear at this point how the company will re-establish trust with investors.”

4. Assessing Aphria’s response

Since the short-seller report went public Monday, Aphria has issued two public responses.

In one statement, the company called the allegations “malicious,” adding that “by their own admission, Hindenburg Research ‘… stands to realize significant gains in the event that the price of any stock covered herein declines.’”

Officials with Aphria could not be reached for comment Wednesday.

Whether Aphria’s response will resonate with investors remains to be seen, Kessner said.

“Any stock is subject to short sellers. If the case being made by a short seller doesn’t have any merit, then that will come out,” he added.

“But simply saying, ‘These are short sellers and they’re just doing it to make money’ doesn’t mean much for anyone.”

5. Regulators taking notice

Meanwhile, Canada’s stock market regulator has issued a warning to publicly traded companies in emerging industries such as cannabis against “problematic promotional activities” aimed at artificially increasing share price.

The notice – issued by the Canada Securities Administrators (CSA) – did not single out any cannabis companies, but experts say many of the practices the memo warns against have been observed in the industry.


Jason Zandberg, analyst at PI Financial in Vancouver, British Columbia, said unscrupulous actors making unsubstantiated claims to benefit stock prices is part of any rising equity market.

“There is no doubt that cannabis has been one of those rising-tide moments and there have been many misleading promoters abusing the widespread investor enthusiasm,” he said.

“I hope the (CSA) does more than just release notices to limit these practices.”




--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Dec 7 2018, 08:27 PM
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In Reply To: blacksheep's post @ Dec 4 2018, 02:04 PM

More stunning allegations - Aphria Part 2: We Believe This Rot Runs Deep - Published on December 6, 2018

QUOTE
As short-biased investors, people often apply a level of skepticism and scrutiny to our work based on an understanding of our incentives. That’s totally fair and we welcome it. A lively, well-informed debate makes for a vibrant market and ultimately benefits everyone.

Often lost in that debate is the role of sell-side research and where the incentives of bankers are pointed. Following our report on Aphria’s LatAm acquisition, several banks either voiced meaningful reservations or placed Aphria’s ratings under review in order to take time to assess our research. We noticed, however, that one bank stood rather starkly at odds with the others.


https://hindenburgresearch.com/aphria-part-...-rot-runs-deep/

Amazing how much ammo short sellers get from following their targets instagram accounts

"rockstars" biggrin.gif

Liberty Health Sciences Responds to Short-Seller Report

https://www.newcannabisventures.com/liberty...-seller-report/
https://twitter.com/DeFrancesco_A?ref_src=t...7Ctwgr%5Eauthor



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Dec 7 2018, 09:39 AM
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Posts: 5,699
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In Reply To: blacksheep's post @ Dec 5 2018, 02:17 PM

Seems the market agrees (for the moment at least) with AGH's CEO - AGH SP up currently 24% @ 23c. Time will tell
Pot shot: how a local marijuana importer is embroiled in a US short seller attack
QUOTE
Althea chief executive and largest shareholder Josh Fegan said he didn't expect the allegations against Aphria would have any impact on his company.

https://www.afr.com/business/banking-and-fi...20181205-h18qwb




--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Dec 5 2018, 03:30 PM
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Carson Block, the CIO of Muddy Waters Research, speaks to Yahoo Finance’s Julia La Roche at the Kase Learning Shorting Conference in New York.

QUOTE
According to Block, numerous players in the capital markets have inadvertently allowed bad behavior.

“Most of America is missing the role American capital markets play in enabling this egregious behavior,” he said.

Many of these executives are incentivized with their compensation in stock, Block noted. They benefit from higher stock prices and when they cash out of their shares.

Long-oriented investors should realize that they “publicly support companies” by providing the bid and contributing to those bad behaviors, he explained. It’s important that they understand their role, Block stressed.

On the sell-side, Block says that analysts who cover these stocks need to be held accountable for the research and calls they make. After presenting their appeals to investors, Block says, short-sellers should resort to calling them out, not by their firm, but by their name.

“I think really the key here for activist short sellers is to name individual names on Wall Street,” Block said. “A lot of activist short sellers in the past would have said ‘Goldman Sachs this or UBS that.’ Nobody has really talked about who is the analyst who put out the buy recommendation? Who is the portfolio manager who decided to upsize their investment in the face of news that the company may have really crossed the line? And I think that’s what we as activist short sellers if we’re going to engage in morality campaigns is that’s what we really have to focus on is individual accountability.”


https://finance.yahoo.com/news/carson-block...-203632085.html

To check out the other presenters at the Kase Learning Shorting Conference see links here - https://twitter.com/KaseLearning



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
 


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