However, Olam has now fought back and decided to take legal action against Muddy Waters now! I believe i call this "Biting more than you can chew" for Muddy Waters.
I can understand them criticizing Sino-Forest or China Public Listed firms because they are those kind of black sheep... but OLAM?! It is a Singapore Corporation with Temasek Holdings as one of its Shareholders!
I don't even need to look at the report to know that Olam is safe and sound. If not, why are they even countering the offense from Carson Block into a legal lawsuit?
Carson Block still got the nerve to question Olam on their defensive reaction, even much worse compared to Sino-Forest... OH COME ON... Sino-Forest is in the wrong of cos they kept quiet! If not, judging from China top management, they will whack the hell out of those Ang Mos who are running through their mouths blatantly!
If you wish to read up more about the entire thing: Go to this link -> http://bizdaily.com.sg/newsite/olam-bound-to-collapse-says-muddy-waters/
While on the technical side...
Olam has seemingly bounced off the past Support line and the circle shows a very Clear BULLISH Engulfing Candlestick Pattern right there.
I believe if Olam wins this war of words, it will instead serve as a better scheme to attract wide attention to its stock. I am going to bargain hunt on this counter and possibly set a stop-loss below the Blue Support Line OR if Muddy waters can really prove to be accurate in its "offence".
Disclaimer: This blog post is entirely of my own personal opinion and not for anyone to follow. Trading involves high risk, which is not suitable for everyone.
There are some facts from Muddy Waters.
ReplyDelete1. High leverage
From Sep12,
Total Debt: ~8.4B
Net Debt: ~7B
2. Aggressive accounting on biological gains
From Sep12,
Revenue: ~17.15B
gains from biological assets : ~110.9K accounting for 27% profits (significant portion of profits).
So this 2 facts are presented as a big concern.
Temasek Holdings, themselves invested in ABC, an aussie listed childcare company back in 07/08, which went bankrupt, so they are not always right. Of course, there are a lot of other bad investment as well.
The CEO of Olam, used to manage CitySpring Biz Trust, and look at its performance, under him, and you decide his ability.
Yeah, you are right. Thanks for sharing the facts of high leverage and biological gains.
DeleteBut i deem this rather as a speculative rebound. :)
Muddy Report: http://d.muddywatersresearch.com/wp-content/uploads/2012/11/MW_OLAM_11272012.pdf
ReplyDelete