Article: A Family Affair At Home Capital Group: Did Re-Charge Just Open Pandora’s Box?

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A Family Affair At Home Capital Group: Did Re-Charge Just Open Pandora’s Box?

The Friendly Bear, 29 September 2016

We published a report on August 23rd exposing a peculiar relationship between Home Capital Group (OTCPK:HMCBF) (HCG.TO) and a previously undisclosed mortgage company called Re-Charge. In response to our report, Home Capital Group put out a press release making a series of claims that downplayed the significance of Re-Charge. Some of the main claims in the press release were as follows:

That “in the normal course of its business, HCG from time to time sells loans to third parties, when loans require work-outs or restructuring.” That “loans sold to all third parties since 2013 totaled less than $125 million” in the context of a “current on-balance sheet total loans portfolio of $18.1 billion.” That “Home Trust has not sold any loans requiring work-out or restructuring to any third party, including Re-Charge Corporation, since September 2015.”
Continue reading “Article: A Family Affair At Home Capital Group: Did Re-Charge Just Open Pandora’s Box?”

Article: David Dayen Series on Naked Short Selling

Article - Media

David Dayen, a persistent chronicler of how oligarchs exploit the financial system to enrich themselves at the expense of others, writes about Chris DiIorio, a stock analyst who for 10 years has obsessively investigated how exactly he came to lose $1 million on one penny stock. A remarkable story ensues.  All article in The Intercept.

The Money is Gone (22 September 2016)

Big Players, Little Stocks, and Naked Shorts (23 September 2016)

Naked Shorts Can’t Stay Naked Forever (24 September 2016)

Calling the SEC (25 September 2016)

Turning Up Like A Bad Penny (26 September 2016)

Were Paper Losses the Goal All Along (27 September 2016)

The Half Billion Glitch (28 September 2016)

 

 

Article: GOLDMAN SACHS NZ TRADING UNDER SCRUTINY IN MARKET MANIPULATION TRIAL

Article - Media, Publications

GOLDMAN SACHS NZ TRADING UNDER SCRUTINY IN MARKET MANIPULATION TRIAL

BusinessDesk, 26 September 2016

Trading by Goldman Sachs has come under the scrutiny of lawyers representing Milford Asset Management portfolio fund manager Mark Warminger in a High Court trial on market manipulation.

Duncan Rutherford, who headed Goldman’s securities team in New Zealand until it was restructured earlier this year, was giving evidence today as part of the first week of the Auckland trial brought by the market regulator, the Financial Markets Authority.

Warminger is accused of making trades on 10 occasions that breached securities law prohibiting trading that is not for a genuine commercial purpose and creates an artificial appearance in the market.

The first cause of action brought by the FMA relates to trading in Fisher & Paykel Healthcare shares on May 27, 2014, where Warminger is said to have bought shares to push up the price of the stock from its opening price of $4.32 to $4.35 through five small buy trades and then later selling 500,000 shares at an allegedly manipulated higher price off-market.

Warminger’s counsel Marc Corlett QC questioned why Goldman Sachs also sold shares in F&P Healthcare in the market’s opening auction that day – 15,000 shares at $4.32 and then 10,000 at $4.33 even though it was “short” in its own facilitation account of 463,000 shares. The firm made a loss on the trades. The stock price had been volatile closing at $4.35 the previous day and in the “4.20s” the day before that.

Rutherford said it wasn’t unusual for the firm to do that given the “bigger picture” of its trading strategy for that day and the commissions it received on trading activity. It also did so in the belief Warminger would be a potential seller that day, he said.

The idea of the facilitation account is not simply to make profits on the shares it trades, he said, but it was part of a suite of services it offered clients and acted like a “bucket” that facilitated trades between clients and increased liquidity on the often volatile New Zealand market.

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Article: BIG PLAYERS, LITTLE STOCKS, AND NAKED SHORTS

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BIG PLAYERS, LITTLE STOCKS, AND NAKED SHORTS

David Dayen, 23 September 2016

CHRIS DIIORIO HAD lost a million dollars when the penny stock he was betting on shed 98 percent of its value in a matter of weeks. But when he looked deeper, he found this wasn’t a typical penny stock pump-and-dump scheme. He was determined to get to the bottom of it.

For one thing, there were two huge companies involved. Continue reading “Article: BIG PLAYERS, LITTLE STOCKS, AND NAKED SHORTS”

Article: Kerrisdale Analysis On First Majestic: A Critical Review

Article - Media, Publications

Kerrisdale Analysis On First Majestic: A Critical Review

The Critical Investor, 16 September 2016

First Majestic Silver Corp. (NYSE: AG , TSX:FR), a large silver producer, took an 8% hit on September 1, 2016 right after opening, after a shorting report was published by the shorting hedge fund Kerrisdale Capital Management on my longtime platform for writing investment analysis, Seeking Alpha. I’m not really into producers as I focus predominantly on juniors, but this analysis was all over the internet and quickly got on my radar.

The first thing that piqued my curiosity, before even reading the piece, was the chart, to see what the impact would be, a few hours after opening at the time. To my surprise, First Majestic already started recovering after the initial sell-off. Even more surprisingly, looking a bit further, the stock appeared to have lost already 32-33% since the peak a few weeks ago, even before the Kerrisdale analysis was published. This was due to a sector-wide correction on lower precious metal prices, in turn caused by Fed rate hike rumours:
Continue reading “Article: Kerrisdale Analysis On First Majestic: A Critical Review”

Article: Jim Chanos: I’m still short Valeant and not about to quit

Article - Media, Publications

Jim Chanos: I’m still short Valeant and not about to quit

Tom DiChristopher, 13 September 2016

Short seller Jim Chanos on Tuesday said he is still short shares of Valeant Pharmaceuticals, and he’s not about to close out his bet against the drug company anytime soon.

“We started shorting the stock in the low $100s, added to it in the $200s, choked on it at $290 but stayed short and added to the stock as recently as early this year,” the Kynikos Associates founder told CNBC’s “Fast Money Halftime Report” on the sidelines of the Delivering Alpha conference in New York. Continue reading “Article: Jim Chanos: I’m still short Valeant and not about to quit”

Article: Kerrisdale declares short position in First Majestic Silver

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Kerrisdale declares short position in First Majestic Silver

HENRY LAZENBY, 01 September 2016

Hedge fund firm Kerrisdale Capital has declared short positions in and own option interests on the stock of Canadian primary silver producer First Majestic Silver. Kerrisdale on Thursday published a report highlighting its belief that the miner was in a “speculative frenzy” and that the company’s valuation was “outrageously detached from reality”.

The New York-based hedge fund firm argued that First Majestic’s stock price could fall between 70% to 80% from its Thursday opening price of $12.02 apiece.

According to Kerrisdale’s latest 13F filing, its US equity portfolio was worth almost $370-million at the end of June, 36.86% less than it was worth at the end of March. The fund, which has staked its bets on a rebound in the technology sector, struggled during the first half of the year, losing 12.1% during the period, compared with the S&P 500 ending the first half with gains of 3.8%.
Continue reading “Article: Kerrisdale declares short position in First Majestic Silver”

Article: First Majestic Silver Has 80% Downside: Kerrisdale’s Latest Short Report

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First Majestic Silver Has 80% Downside: Kerrisdale’s Latest Short Report

Jayson Derrick, 01 September 2016

First Majestic Silver Corp AG 0.03% , a mining company that focuses on silver production, exploration, and development in Mexico is an “absurdly overvalued”, “heavily promoted” stock that has been driven by a “speculative frenzy,” according to Kerrisdale Capital.

Kerrisdale Capital began its short thesis on First Majestic by pointing out that like all mining companies, First Majestic’s stock price is obviously tied to the commodity it explores. The company’s stock fell 90 percent from the peak of the silver market in 2011 to recent lows. On the other hand, the stock seems to have “gotten a new lease on life” and surged 268 percent since the start of the year, marking an increase eight times larger than the actual gains silver notched.

As such, Kerrisdale estimates the stock is now trading at 5x its net asset value, which marks an “astonishing” premium to its peers and a “gross violation of common sense.”
Continue reading “Article: First Majestic Silver Has 80% Downside: Kerrisdale’s Latest Short Report”

Article: FIRST MAJESTIC SILVER CORP (AG) VALUATION UP IN THE CLOUDS, BUT NO SILVER LINING: KERRISDALE

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FIRST MAJESTIC SILVER CORP (AG) VALUATION UP IN THE CLOUDS, BUT NO SILVER LINING: KERRISDALE

ValueWalk, 01 September 2016

First Majestic Silver Corp. is, in the words of its founder and CEO, “the purest silver company in the world,” with six operating mines and a handful of development projects, all located in Mexico. Like any miner, First Majestic has seen its market value fluctuate in sympathy with the price of its key commodity; from the peak of the silver market in 2011 to its recent low point, for instance, First Majestic declined 90%. As precious-metal prices have rebounded, however, First Majestic has gotten a new lease on life, rising 268% year-to-date – an increase eight times larger than that of silver itself.

This speculative frenzy – exacerbated by an ongoing, company-funded stock-promotion campaign – has gone too far: First Majestic’s valuation is now outrageously detached from reality. We estimate that the company trades at 5x net asset value (NAV) – an astonishing premium to peers and a gross violation of common sense. While the market prices other precious-metals miners at just 17% of the spot value of their measured and indicated mineral resources – gold and silver in the ground that still need to be extracted, processed, and sold over many years, justifying a large discount – First Majestic trades at a whopping 77% of this value. Not only is the company ludicrously expensive relative to its peers; it’s also expensive relative to its own history. For example, compared to the last time the price of silver was at its current level, First Majestic’s stock price is now 17% higher – yet its silver reserves per share are now 30% lower.
Continue reading “Article: FIRST MAJESTIC SILVER CORP (AG) VALUATION UP IN THE CLOUDS, BUT NO SILVER LINING: KERRISDALE”

Article: Kerrisdale Capital Releases Negative Report on First Majestic Silver Corp. (AG / FR) and Announces Conference Call Schedule

Article - Media, Publications

Kerrisdale Capital Releases Negative Report on First Majestic Silver Corp. (AG / FR) and Announces Conference Call Schedule

MarketScreener, 01 September 2016

Mining Company’s Stock Price Is Ridiculously Overvalued After Paid Promotional Campaign
-First Majestic trades at a uniquely ludicrous multiple of the value of the precious metals it owns, with 70-80% downside
-Sell-side estimates, comparisons to peers, and even First Majestic’s own internal models confirm that the company is massively overvalued
-First Majestic and an affiliated company have recently hired stock promoters to hype their prospects to an audience of retail investors
-First Majestic’s founder and CEO is a former professional stock promoter, with ties to a defunct Panamanian brokerage firm implicated in pump-and-dump scams and insider trading
Continue reading “Article: Kerrisdale Capital Releases Negative Report on First Majestic Silver Corp. (AG / FR) and Announces Conference Call Schedule”

Article: Well-known short seller targets First Majestic Silver Corp

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Well-known short seller targets First Majestic Silver Corp

Jonathan Ratner, 01 September 2016

Canadian miner First Majestic Silver Corp. has become the target of well-known short seller Kerrisdale Capital Management. The hedge fund, founded by its chief investment officer, Vancouver-raised Sahm Adrangi, called the stock “absurdly overvalued” in a new report released on Thursday.

First Majestic, a Mexico-focused silver miner, has seen its shares climb nearly 250 per cent in 2016, as sentiment toward the mining sector rebounds along with precious metals prices. Kerrisdale, whose short-selling campaigns include ChinaCast Education Corp. in 2011 and DISH Network Co. in May 2016, believes First Majestic is “ludicrously expensive” relative to both its peers and its own history.

“This speculative frenzy – exacerbated by an ongoing, company-funded stock-promotion campaign – has gone too far: First Majestic’s valuation is now outrageously detached from reality,” the firm said in the report.
Continue reading “Article: Well-known short seller targets First Majestic Silver Corp”

Article: Kerrisdale announces short position in First Majestic Silver Corp

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Kerrisdale announces short position in First Majestic Silver Corp

Lawrence Delevingne, 01 September 2016

NEW YORK (Reuters) – Kerrisdale Capital Management now holds a short position in the stock and via options of First Majestic Silver Corp. FR.TO, according to a report released Thursday by the hedge fund firm.

Kerrisdale, led by Sahm Adrangi, wrote in the report that the Canadian mining company is in a “speculative frenzy” and that its valuation is “now outrageously detached from reality.”

Kerrisdale, which manages approximately $350 million and has lost money this year through July, said First Majestic Silver could fall between 70 percent and 80 percent from its current levels near $12 a share. The stock has gained approximately 267 percent this year through Wednesday.

U.S. listed shared of First Majestic fell more than 5 percent in early trading Thursday following news of the report. Adrangi declined to comment. First Majestic did not immediately respond to a request for comment.
Continue reading “Article: Kerrisdale announces short position in First Majestic Silver Corp”

Article: First Majestic Silver Corp. (AG) Valuation Up in the Clouds, but No Silver Lining

Article - Media, Publications

First Majestic Silver Corp. (AG) Valuation Up in the Clouds, but No Silver Lining
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Kerrisdale Capital, 01 September 2016

First Majestic Silver Corp. is, in the words of its founder and CEO, “the purest silver company in the world,” with six operating mines and a handful of development projects, all located in Mexico. Like any miner, First Majestic has seen its market value fluctuate in sympathy with the price of its key commodity; from the peak of the silver market in 2011 to its recent low point, for instance, First Majestic declined 90%. As precious-metal prices have rebounded, however, First Majestic has gotten a new lease on life, rising 268% year-to-date – an increase eight times larger than that of silver itself.

This speculative frenzy – exacerbated by an ongoing, company-funded stock-promotion campaign – has gone too far: First Majestic’s valuation is now outrageously detached from reality. We estimate that the company trades at 5x net asset value (NAV) – an astonishing premium to peers and a gross violation of common sense. While the market prices other precious-metals miners at just 17% of the spot value of their measured and indicated mineral resources – gold and silver in the ground that still need to be extracted, processed, and sold over many years, justifying a large discount – First Majestic trades at a whopping 77% of this value. Not only is the company ludicrously expensive relative to its peers; it’s also expensive relative to its own history. For example, compared to the last time the price of silver was at its current level, First Majestic’s stock price is now 17% higher – yet its silver reserves per share are now 30% lower.
Continue reading “Article: First Majestic Silver Corp. (AG) Valuation Up in the Clouds, but No Silver Lining”

THE DOLLAR HAS NO INTRINSIC VALUE : DO YOUR ASSETS?