Muddy Waters Research

Muddy Waters was founded by Carson Block, an American short-seller.{{Cite web |title=Short-Seller Carson Block Says He's Wary of Alibaba |date=10 September 2014 |url=https://dealbook.nytimes.com/2014/09/10/short-seller-carson-block-says-hes-wary-of-alibaba/ |access-date=2017-03-05 |archive-date=2019-10-03 |archive-url=https://web.archive.org/web/20191003022730/https://dealbook.nytimes.com/2014/09/10/short-seller-carson-block-says-hes-wary-of-alibaba/ |url-status=live }} The company is named after the Chinese proverb "muddy waters makes it easy to catch fish" ({{Wikt-lang|zh-Hant|渾水摸魚}}).{{Cite web |title=About us |url=http://www.muddywatersresearch.com/about/ |access-date=2014-04-30 |archive-date=2014-05-28 |archive-url=https://web.archive.org/web/20140528013020/http://www.muddywatersresearch.com/about/ |url-status=live }} In January 2015, the firm raised an initial $100 million for its investment strategy.

Muddy Waters gained notability in 2011 following the release of a negative research report on Sino-Forest Corp,{{Cite web |last=Block |first=Carson |date=2 June 2011 |title=Muddy Waters Initiating Coverage on TRE.TO, OTC:SNOFF – Strong Sell |url=https://www.muddywatersresearch.com/research/tre/initiating-coverage-treto/ |website=Muddy Waters Research}} in which Muddy Waters alleged that the company was fraudulently inflating its assets and earnings hence, making the company's shares worthless. Muddy Waters declared that the Sino-Forest was a "multi-billion dollar ponzi scheme". As a result, shares of Sino-Forest fell by 82% following Muddy Waters report, forcing prominent investor John Paulson to sell his entire stake at a $US720 million loss.{{Cite news |date=2011-06-21 |title=Paulson Dumping Sino-Forest May Cost Clients $720 Million |language=en |work=Bloomberg.com |url=https://www.bloomberg.com/news/articles/2011-06-21/paulson-dumping-sino-forest-may-deal-clients-720-million-loss |access-date=2022-07-14}} Sino-Forest dismissed Muddy Waters allegations of fraud and launched an independent investigation for PricewaterhouseCoopers to oversee.{{Cite web |last=Weisenthal |first=Joe |title=Here's The Key Detail In The Earnings Report Of Alleged China Scam Sino-Forest |url=https://www.businessinsider.com/sino-forest-earnings-are-out-2011-6 |access-date=2022-07-14 |website=Business Insider |language=en-US}} On March 30, 2012, Sino-Forest filed for bankruptcy protection in Canada under the Companies' Creditors Arrangement Act.{{citation needed|date=July 2022}}

In 24 October 2013, Muddy Waters released a report on NQ Mobile, a Chinese-based cybersecurity and mobile application company. Muddy Waters's research report claimed NQ Mobile had "fictitious" customers and revenues. In April 2015, the co-CEO of NQ Mobile, Omar Khan, stepped down after the stock had fallen nearly 84 percent.{{Cite web |title=Carson Block sounds like he's having a great day since the co-CEO of one of his short targets stepped down |website=Business Insider |url=http://www.businessinsider.com/nq-mobile-co-ceo-omar-kahn-steps-down-2015-4 |access-date=2016-08-22 |archive-date=2016-08-25 |archive-url=https://web.archive.org/web/20160825192158/http://www.businessinsider.com/nq-mobile-co-ceo-omar-kahn-steps-down-2015-4 |url-status=live }}

Block has also released reports on companies including American Tower Corp., Noble Group, Focus Media, Olam International, Groupo Casino, Orient Paper, China Media Express, Bank of the Ozarks, Rino International, Bolloré, and TeliaSonera.{{Cite web |title=Research {{!}} Muddy Waters Research |url=http://www.muddywatersresearch.com/research/ |access-date=2016-08-23 |website=www.muddywatersresearch.com |archive-date=2016-08-14 |archive-url=https://web.archive.org/web/20160814094437/http://www.muddywatersresearch.com/research/ |url-status=live }}

In April 2016 Muddy Waters turned against German MDAX listed company Ströer SE & Co. KGaA. Among other things Muddy Waters accused Germany's biggest advertising company of violation of IFRS accounting directives and claiming that digital organic growth rates presented by the company were faulty,{{Cite web |title=Muddy Waters is Short Ströer (SAX:GR) |date=21 April 2016 |url=https://www.muddywatersresearch.com/research/sax/mw-is-short-stroeer/ |access-date=2020-05-01 |archive-date=2020-07-02 |archive-url=https://web.archive.org/web/20200702105750/https://www.muddywatersresearch.com/research/sax/mw-is-short-stroeer/ |url-status=live }} resulting in a loss of its stocks by 25%, with prices falling from €52 to just under €35 within 45 minutes of a TV presentation by Muddy Waters on the company. Shortly after German Federal Financial Supervisory Authority inquired the case suspecting overstepping of ethical and legal lines by Muddy Waters Capital. One aspect dealt with Muddy Waters failing to report the build up of a short-position exceeding 0,5% of stocks in due time. According to German financial law this notice has to be given at least one day after creating a short-position within that limit. According to public prosecution office Muddy Waters has overstepped that time period by five days. Since June 2017 public prosecution department of Frankfurt am Main investigates the case with respect to alleged market manipulation by Muddy Waters in the case of Ströer.

In August 2016, Muddy Waters released a report claiming that pacemakers and other implantable medical devices made by St. Jude Medical were highly vulnerable to hacking.{{Cite web |last=Washington |first=Richard |date=2016-08-25 |title=St. Jude Medical drops after Muddy Water findings of 'negligent product design' |url=https://www.cnbc.com/2016/08/25/st-jude-medical-drops-after-muddy-water-findings-of-negligent-product-design.html |access-date=2017-04-11 |website=CNBC |archive-date=2017-04-12 |archive-url=https://web.archive.org/web/20170412062829/http://www.cnbc.com/2016/08/25/st-jude-medical-drops-after-muddy-water-findings-of-negligent-product-design.html |url-status=live }} St. Jude Medical denied the claims made by Muddy Waters, stating that they were "false and misleading" and sued the firm for defamation.{{Cite news |date=2016-09-07 |title=St. Jude Medical Files Lawsuit Against Muddy Waters |work=Bloomberg.com |url=https://www.bloomberg.com/news/articles/2016-09-07/st-jude-medical-files-lawsuit-against-muddy-waters |access-date=2017-04-11 |archive-date=2016-10-14 |archive-url=https://web.archive.org/web/20161014131906/http://www.bloomberg.com/news/articles/2016-09-07/st-jude-medical-files-lawsuit-against-muddy-waters |url-status=live }} In January 2017, the U.S. Food & Drug Administration and the Department of Homeland Security released the results of an investigation into St. Jude's cybersecurity vulnerabilities, which confirmed the findings of Muddy Waters.{{Cite news |date=2017-01-10 |title=St. Jude admits security vulnerabilities in cardiac devices |language=en |work=Healthcare IT News |url=http://www.healthcareitnews.com/news/st-jude-admits-security-vulnerabilities-cardiac-devices |access-date=2017-04-11 |archive-date=2017-04-12 |archive-url=https://web.archive.org/web/20170412062613/http://www.healthcareitnews.com/news/st-jude-admits-security-vulnerabilities-cardiac-devices |url-status=live }}

On his process for finding wrongdoing at companies, Block has been quoted saying "It's a bit like solving a puzzle. You're really trying to find the pieces and how they match together to make a clear picture of just what the company is doing."{{Cite web |title=Here's how famous short seller Carson Block picks a takedown target |url=http://www.businessinsider.com/how-short-seller-carson-block-picks-target-2016-5 |access-date=2016-08-17 |publisher=Business Insider |archive-date=2016-08-16 |archive-url=https://web.archive.org/web/20160816132533/http://www.businessinsider.com/how-short-seller-carson-block-picks-target-2016-5 |url-status=live }}

Block appears frequently as a commentator on Bloomberg Television, CNBC and the BBC. He has written op-eds in the Wall Street Journal, Financial Times, and The New York Times on various topics related to improving corporate governance and market transparency.{{Cite web |title=Carson Block: The Man Behind Muddy Waters |url=http://www.baruch.cuny.edu/calendar/EventList.aspx?fromdate=9/5/2014&todate=10/4/2014&display=&type=public&eventidn=10550&view=EventDetails&information_id=26793&print=print |access-date=2016-08-17 |archive-date=2016-09-23 |archive-url=https://web.archive.org/web/20160923133724/http://www.baruch.cuny.edu/calendar/EventList.aspx?fromdate=9%2F5%2F2014&todate=10%2F4%2F2014&display=&type=public&eventidn=10550&view=EventDetails&information_id=26793&print=print |url-status=live }}{{Cite news |last=Block |first=Carson C. |date=2012-05-03 |title=China's Auditing Train Wreck |work=Wall Street Journal |url=https://www.wsj.com/articles/SB10001424052702304746604577381630586235646 |access-date=2016-08-18 |issn=0099-9660 |archive-date=2016-08-27 |archive-url=https://web.archive.org/web/20160827091402/http://www.wsj.com/articles/SB10001424052702304746604577381630586235646 |url-status=live }}{{Cite news |last=Block |first=Carson |date=2014-03-06 |title=Beware the false reassurance of corporate probes |work=Financial Times |url=http://www.ft.com/cms/s/0/813828da-9fe1-11e3-9c65-00144feab7de.html |access-date=2016-08-18 |issn=0307-1766 |archive-date=2015-11-20 |archive-url=https://web.archive.org/web/20151120021736/http://www.ft.com/cms/s/0/813828da-9fe1-11e3-9c65-00144feab7de.html |url-status=live }}

On June 29, 2017, Muddy Waters opened research into Prothena Corp PLC, a biotech company whose leading product the shortseller claimed was commercially unviable.{{Cite news |date=2017-06-29 |title=Muddy Waters Is Short Prothena Corporation PLC (PRTA) |language=en-US |work=ValueWalk |url=http://www.valuewalk.com/2017/06/muddy-waters-short-prothena-corporation-plc-prta/ |access-date=2017-06-30 }}

In August 2019, Muddy Waters announced that it was short Burford Capital,{{Cite web |date=2019-08-07 |title=Burford Capital attacks short sellers as shares plunge 40 per cent |url=https://www.cityam.com/burford-capital-attacks-short-sellers-as-shares-plunge-30-per-cent/ |access-date=7 August 2019 |website=City A.M. |archive-date=2019-08-07 |archive-url=https://web.archive.org/web/20190807100831/https://www.cityam.com/burford-capital-attacks-short-sellers-as-shares-plunge-30-per-cent/ |url-status=live }}{{Cite news |last1=Russell |first1=Harriet |last2=O'Dwyer |first2=Michael |date=2019-08-07 |title=Short seller Muddy Waters attacks litigation funder Burford Capital |work=The Telegraph |url=https://www.telegraph.co.uk/business/2019/08/07/short-seller-muddy-waters-attacks-litigation-funder-burford/ |access-date=7 August 2019 |archive-date=2019-08-07 |archive-url=https://web.archive.org/web/20190807100828/https://www.telegraph.co.uk/business/2019/08/07/short-seller-muddy-waters-attacks-litigation-funder-burford/ |url-status=live }} citing issues, as Muddy Waters saw it, with Burford's fair value accounting practices.{{Cite web |date=8 August 2019 |title=Muddy Waters criticises Burford Capital: the report unspun |url=https://www.thetimes.com/business-money/economics/article/muddy-waters-criticises-burford-capital-the-report-unspun-z9pm0hklm |access-date=8 August 2019 |website=The Times |archive-date=8 August 2019 |archive-url=https://web.archive.org/web/20190808024819/https://www.thetimes.co.uk/edition/business/muddy-waters-criticises-burford-capital-the-report-unspun-z9pm0hklm |url-status=live }} In December 2019, Muddy Waters announced it was short NMC Health.{{Cite web |title=Research |url=http://d.muddywatersresearch.com/research/ |access-date=2020-06-30 |website=Muddy Waters Research |language=en-US |archive-date=2020-06-30 |archive-url=https://web.archive.org/web/20200630210432/http://d.muddywatersresearch.com/research/ |url-status=live }}

In January 2020, Muddy Waters warned that Luckin Coffee, what they termed a "fundamentally broken business", fabricated its sales and expenses whilst management cashed out on the stock; on April 2, the company admitted that its COO and subordinates significantly fabricated corporate metrics, sending the stock down over 70%.{{Cite web |last=Pisani |first=Bob |date=2020-04-03 |title=Luckin Coffee is a painful reminder of 'the extreme fraud risk' of some China-based companies |url=https://www.cnbc.com/2020/04/03/luckin-coffee-debacle-is-a-painful-reminder-of-fraud-risk.html |website=CNBC.com |access-date=2020-04-04 |archive-date=2020-04-04 |archive-url=https://web.archive.org/web/20200404054555/https://www.cnbc.com/2020/04/03/luckin-coffee-debacle-is-a-painful-reminder-of-fraud-risk.html |url-status=live }}

In May 2020, Muddy Waters announced that it is short GSX Techedu Inc. (GSX US).{{Cite web |title=Muddy Waters shorts GSX Techedu Inc. (GSX US) |date=18 May 2020 |url=https://www.alpha-week.com/muddy-waters-shorts-gsx-techedu-inc |access-date=2020-05-18 |archive-date=2020-05-25 |archive-url=https://web.archive.org/web/20200525104146/https://www.alpha-week.com/muddy-waters-shorts-gsx-techedu-inc |url-status=live }}

In November 2020, Muddy Waters announced that it is short JOYY Inc (NASDAQ: YY).{{Cite news|date=2020-11-18|title=Short-seller Muddy Waters takes aim at Chinese social media firm JOYY|language=en|work=Reuters|url=https://in.reuters.com/article/us-joyy-muddy-waters-idUSKBN27Y2V9|archive-url=https://web.archive.org/web/20201127175321/https://in.reuters.com/article/us-joyy-muddy-waters-idUSKBN27Y2V9|url-status=dead|archive-date=November 27, 2020|access-date=2020-11-19}}

In March 2021, Muddy Waters announced that it is short XL Fleet Corp (NYSE: XL US).{{Cite news|date=2021-03-03|title=XL Fleet shares tumble after Muddy Waters takes short position|language=en|work=Reuters|url=https://www.reuters.com/article/us-xl-fleet-muddy-waters-research/xl-fleet-shares-drop-over-16-after-muddy-waters-takes-short-position-idUSKBN2AV2J1}}

In July 12, 2022, Muddy waters announced that it is short Hannon Armstrong Sustainable Infrastructure Capital (NYSE:HASI US),{{Cite web |last=Waters |first=Muddy |date=July 12, 2022 |title=MW is Short Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI US) |url=https://www.muddywatersresearch.com/research/hasi/mw-is-short-hasi/ |access-date=14 July 2022 |website=Muddywatersresearch.com}} citing issues with Hannon Armstrong's accounting which it considered both "complex and misleading" making their "financial statements effectively meaningless".{{Cite web |date=July 12, 2022 |title=MW is Short Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI US) |url=https://www.muddywatersresearch.com/research/hasi/mw-is-short-hasi/ |access-date=July 14, 2022 |website=Muddy Waters Research}}

In November 2022, Muddy Waters announced it was short on DLocal Ltf (DLO US).{{Cite web |date=November 16, 2022 |title=Muddy Waters is short DLocal Ltd |url=https://www.muddywatersresearch.com/research/dlo/mw-is-short-dlo/ |website=Muddy Waters Research}}

In June 2024, it announced a short on Eurofins Scientific.{{Cite web |date=June 24, 2024 |title=Eurofins Sinks After Muddy Waters Discloses Short Position

|url=https://finance.yahoo.com/news/eurofins-sinks-muddy-waters-discloses-114042762.html|website=Yahoo Finance}}

• Hindenburg Research
• Citron Research
• James Chanos
• Short selling
• Sino-Forest
• Olam International
• The Big Short

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Category:Research and analysis firms of the United States

Category:Privately held companies based in New York City

Category:Private equity portfolio companies