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When Muddy Waters’ founder Carson Block announces that he’s shorting a company, the Street listens. That’s why everyone is talking about Olam, a commodities trading firm based in Singapore.Anybody can be wrong though, so it’s important to get other arguments in the mix as well
Dwight Anderson is a Managing Partner of Ospraie Management, LLC, a hedge fund with a history of working in the commodities space.
Anderson sat down with Stephanie Ruhle for an interview at Bloomberg’s Hedge Fund Summit, and she asked him what he thought of Block’s short.
He said that Olam is probably “aggressive” with its accounting and has taken on more leverage than he’d like, but he wouldn’t go as far as saying it’s a fraud (he says his fund has no position in the company).
Fraud or no fraud, though, Anderson pointed out that there could be a serious problem with Block’s short.
“With GIC (GIC is the Government of Singapore Investment Corporation) and government Singapore as a sponsor… I do think he’s overstated his case…I don’t think they (the government) will look the other way).”
The government owns 16% of Olam and just underwrote a $750 million right offering for the company earlier this week. Anderson is saying that they’re likely ready to put up the cash to keep the company afloat as long as they have to.
Correction: While Anderson said it was GIC that owned part of Olam, it is actually Singapore’s sovereign wealth fund, Temasek Holdings, that owns 16% of the company.