Hedge Fund Hits Out At Chinese Copper Wire Co.

Aug 2 2011 | 12:07pm ET

Another hedge fund has taken aim at a Chinese company, again to great effect.

Absaroka Capital Management, taking a page from the playbook of Muddy Waters, accused copper wire-maker Lihua International of "excessive stock promotion" and "illogical financial results." The hedge fund also questioned deals between the company and another company owned by Lihua's chief operating office.

The Absaroka report pushed Lihua's shares on the Nasdaq Stock Market down 22.5% in about a half-hour yesterday, although they rebounded to close down just 11%. This morning, the stock, after a brief plunge, was trading above $6.00, or more than twice what Absaroka says it is worth.

A spokesman for Lihua told Bloomberg News that Absaroka's allegations are "pretty baseless" and that the company was preparing a response.

In June, Muddy Waters, another hedge fund, issued a damning report on Chinese timberland company Sino-Forest Corp, pushing that company’s shares down by some 90% and, in the process, costing Paulson & Co. almost $600 million.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Often seen as a passion project, or part of a philanthropic venture, rare and fine stringed instruments offer an exciting option to diversify one’s investment portfolio while providing an opportunity for an exceptional long-term investment.