China Yurun Food Group Limited, a meat processing company, is getting clobbered today amid rumours that it’s being investigated by short-seller Muddy Waters Research.
Muddy Waters made quite a name for itself earlier this month by releasing a negative report about Chinese forest operating company, Sino-Forest. Their findings sent the company’s stock into a nose-dive and cost hedge fund legend John Paulson over $100 million. Since then, investors have been sceptical of Chinese companies- concerned over their accounting practices- and more companies have come under fire from the SEC.
If Muddy Waters were in fact planning to release its findings on Yurun, it would be the first time the researcher reported on a company that was not traded on Western Exchanges.
The word from head researcher Carson Block, however, is mum (via Reuters):
It is obviously not in our interest to comment on whether or not we are planning on releasing a report on a given company. Investors should be sceptical and greatly cautious about rumours related to our upcoming reports.
We take pains to keep our research activities confidential, and a widespread market rumour would either represent a significant failure on our part, or is false.
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