Article: China tells Alibaba to sell off media assets in tech crackdown

Article - Media, Publications

China tells Alibaba to sell off media assets in tech crackdown

Mark Sweney and Helen Davidson, 16 March 2021

Beijing has ordered e-commerce company Alibaba to sell off media assets including Hong Kong’s South China Morning Post (SCMP) as the Chinese government looks to crack down on the growing public influence held by the country’s sprawling tech conglomerates.

Alibaba has become the lightning rod in the crackdown on big tech after founder Jack Ma, one of China’s most popular, outspoken and wealthiest entrepreneurs, delivered a blunt speech last year criticising national regulators that reportedly infuriated the president, Xi Jinping.

Following the comments, Chinese regulators blocked the $34bn stock market flotation of Alibaba online payments subsidiary Ant Group, which would have been the biggest share offering in history, and Ma disappeared from the public eye for three months. Last week, it emerged that regulators are reportedly preparing to hit Alibaba with a record fine in excess of $975m over anti-competitive practices.

China’s protectionist business regime, which shuts out foreign companies including Google and Netflix, has enabled a group of homegrown conglomerates to flourish as the country looks to build the next wave of global tech champions to challenge Silicon Valley.

Beijing has struggled to maintain control over their activities and wider influence with Alibaba’s media empire expanding to buy SCMP, Hong Kong’s premier English-language newspaper, in 2016 and holding stakes in social network Weibo, video streaming service Youku and Yicai Media Group, one of the country’s most influential news outlets.

“What is interesting here is that the Chinese Communist party has done a good job of cultivating huge tech giants, national champions,” said Jamie MacEwan, a senior media analyst at Enders Analysis. “But there has always been a split under the surface between those who want to encourage the great tech leap forward and a growing unease among those worried about these huge companies and the big public figures at the head of them, like Ma, outgrowing the patronage of the [Chinese communist] party.”

Read Full Article

Article: Luckin Coffee Investors Work Toward Stock Suit Settlement

Article - Media, Publications

Luckin Coffee Investors Work Toward Stock Suit Settlement

Dean Seal, 08 March 2021

Luckin Coffee and a proposed class of its investors told a New York federal judge that they are working toward a potential resolution of claims that the Chinese coffee chain used “sham transactions” to fake hundreds of millions of dollars in sales.

The parties received approval on Friday from U.S. District Judge John P. Cronan for certification of a settlement class of investors who acquired Luckin securities between its initial public offering in May 2019 and July 2020, when a Cayman Islands court appointed joint provisional liquidators to oversee Luckin’s operations and negotiate with its creditors. Continue reading “Article: Luckin Coffee Investors Work Toward Stock Suit Settlement”

Article: Mercurity Fintech Holding Inc. Announced Changes to Board Composition

Article - Media, Publications

Mercurity Fintech Holding Inc. Announced Changes to Board Composition

PRNewswire, 04 March 2021

Mercurity Fintech Holding Inc. (the “Company” or “MFH”) (Nasdaq: MFH) today announced that Mr. Cong Huang has been appointed as Independent Director to the Company’s Board of Directors (the “Board”), and Mr. Liu Hao has been appointed as a Director to the Board. These changes were put into effect on March 4, 2021.

Mr. Cong Huang is a renowned researcher and entrepreneur in financial technology innovation. After receiving the PhD degree in Statistics from Yale University, he worked at Columbia University as an Assistant Professor in the Statistics Department, conducting research focused on algorithms and implementations in data mining. After a period of time, he decided to leave campus to develop his career in financial innovation and technology. At Goldman Sachs (GS), he played a pivotal role in developing various new models and algorithms to improve the speed and accuracy of options pricing methods. At McKinsey & Company, he helped financial institutions implement strategic innovation and transformation initiatives. Continue reading “Article: Mercurity Fintech Holding Inc. Announced Changes to Board Composition”

Article: Boeing to Pay $2.5 Billion to Settle Criminal Charge Over MAX Jet

Article - Media, Publications

Boeing to Pay $2.5 Billion to Settle Criminal Charge Over MAX Jet

Evie Liu, 07 January 2021

Boeing agreed to pay $2.5 billion to settle a criminal charge that it sought to deceive the Federal Aviation Administration as it sought initial certification for the troubled 737 MAX jet.

The Justice Department disclosed the agreement Thursday in a news release, titled in part, “Boeing Charged with 737 MAX Fraud Conspiracy.” The department said it and the company had entered into a deferred prosecution agreement that will give Boeing amnesty if it meets certain criteria.

Read Full Article

Article: Berkshire Hathaway Bet Big on Dialysis Giant DaVita. Jim Chanos Thinks It’s a Scam

Article - Media

Berkshire Hathaway Bet Big on Dialysis Giant DaVita. Jim Chanos Thinks It’s a  Scam.

Christine Idzelis, Institutional Investor, 4 December 2019

DaVita provides life-extending dialysis treatment to more than 200,000 patients. But is it gaming the system through questionable donations to the American Kidney Fund?

Read full article.

Comment: Chanos is calling DVA a fraud. Stock was $59 it fell to $53.   Then it went to $115.    NICE WORK.  Buffet too big to cheat?

Article: Short sellers’ accusations against Chinese reverse mergers: Information analytics or guilt by association?

Article - Media, Publications

Short sellers’ accusations against Chinese reverse mergers: Information analytics or guilt by association?

Hongqi Liu, Nan Xu, Jianming Ye, 02 June 2015

This paper studies short sellers’ trading strategies and their effects on the financial market by examining their accusations of fraud against Chinese reverse merger firms (CRMs) in the US. We find that short sellers rely on firms’ fundamental information, especially relative financial indicators, to locate their “prey.” Specifically, they compare a target firm’s financial indicators (e.g., growth and receivables) with both the industry average and the firm’s history. Continue reading “Article: Short sellers’ accusations against Chinese reverse mergers: Information analytics or guilt by association?”

Article: Stripped bare

Article - Media

Stripped bare

Securities Lending Times, 20 August 2013

“Abusive”, “like a form of terrorism” and “funny paper”are three descriptions of naked short selling, given by the Securities and Exchange Committee, a life insurance company CEO, and broker-dealer Jeffrey Wolfson, respectively.

They do not do much to dispel the belief of naked shorting as a practice that is even worse than selling a borrowed security, only to buy it back at a lower price—what we know as covered short selling.

Read full article.

Paper: Naked Short Selling: Is it Information-Based Trading?

Paper

Naked Short Selling: Is it Information-Based Trading?

Harrison Liu, Sean T. McGuire, Edward P. Swanson

SSRN Electronic Journal, 21 June 2013

Citing a widely held belief that naked short selling is not based on company fundamentals, the SEC (2008) has substantially tightened Reg. SHO close-out regulations in an effort to eliminate naked short selling. Contrary to accepted belief, we find that accounting fundamentals are highly significant in explaining naked short sales. Further, naked short sales contain incremental information about future stock prices: Abnormal returns from a long/short trading strategy that buys (sells short) shares with low (high) short interest are more than seven times larger using naked and covered short interest, compared to returns using only covered short interest (15.2 percent vs. 2.1 percent annualized). Our findings show that recent actions by regulators to eliminate naked short sales are likely to impede informed arbitrage and reduce market efficiency.

PDF ( 41 pages): Naked Short Selling: Is it Information-Based Trading?

Article: Exposed by a Short Seller, Luckin Coffee, another Chinese Company that Defrauded US Investors, Filed for Bankruptcy in New York Today

Article - Media, Publications

Exposed by a Short Seller, Luckin Coffee, another Chinese Company that Defrauded US Investors, Filed for Bankruptcy in New York Today

Wolf Richter, 05 February 2011

Luckin Coffee, a Starbucks imitator and one of many Chinese companies with no operations in the US that have their IPOs in the US and raise funds in the US, filed for Chapter 15 bankruptcy in New York today. The downfall of Luckin was triggered by short seller Carson Block of Muddy Waters that published detailed allegations on January 31, 2020, of massive fraud at the company, perpetrated at the highest levels.

By the time the Muddy Waters report came out, the company’s stock – well, American Depositary Receipt (ADR) – had skyrocketed from the IPO price of $17 a share in May 2019, to $50 a share in January 2020, giving the company a market capitalization (share price times shares outstanding) of $12.6 billion. Continue reading “Article: Exposed by a Short Seller, Luckin Coffee, another Chinese Company that Defrauded US Investors, Filed for Bankruptcy in New York Today”