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:
