Short Seller Helps Sink China's Biggest Bad-Loan Manager
By Bloomberg News
Glaucus Research on Fullshare
Share suspended after plunging by 10%
Fullshare another $13bn Hong Kong stockmarket mystery
by Jacky Wong (Wall Street Journal) dated 27 September 2016
Firstly, mystery solved.
Secondly, I would like to share my views about short sellers (Muddy Waters, Glaucus, etc...) I think short sellers especially the ones that have strong working ethics often provide research reports that provide more comprehensive research/due diligence then most standard reports from conventional analysts. Additionally, their reports have clear indications of their vested interests unlike conventional analysts. In this regard, we stand to learn more from reading short-seller reports than conventional analyst reports with key points to learn in terms of spotting of red flags.
Thirdly, I think short sellers play a vital role in the stock market to ensure that companies that engage in fraud are discovered. They put pressure on bad management to correct their mistakes and they encourage investors to do more due diligence and to avoid companies with red flags. In other words, "short-selling" incentives the discovery of frauds and mismanagement and covers the area that auditors/analyst do not.
Please do note I am not a short-seller and do not intend to be one, the risks associated with short selling far outweigh the risks of holding a stock in a long position. I want to just share my opinion that it is always good to read short-sellers reports to learn the multitudes of methods of fraud and some of the key red flags you should be aware of when reading an annual report as part of your ability to minimize your downside in stock picking.