Anonymous Analytics: Hubaboa International is a "pump and dump scheme" | Hacker News Reader

Anonymous Analytics: Hubaboa International is a "pump and dump scheme"

anonanalytics.com

63 pointslook_lookatme17 comments

See Citron Research (http://citronresearch.com/) and Muddy Waters Research (http://www.muddywatersresearch.com/).

There's a whole cottage industry of research companies trying to expose frauds in Chinese companies, not always necessarily altruistically (usually a huge short position is accumulated prior to the publishing of their public report).

Interesting to see Anonymous get into the game, wonder what they gonna fund with their profit.

Is it possible companies like these or established funds are supplying the Anonymous movement with material support in order to feed off the somewhat outsized publicity Anon gets when they release something like this?

If you are referring to the research firms (Muddy Waters & Citron) they are already well established in the investment community and probably would no benefit that much from teaming up with people w/in Anon. Citron has been around for almost a decade now (formerly stocklemon.com.)

It's always possible that some small or mid-sized fund could be involved.

What I find interesting here is that while I could get behind research published by an established firm with known directors, researchers, etc., it's much more difficult to know what to do with this "Anon" report because for all I know it could be a scheme itself (same as you described, accumulate a short position before releasing false negative information). "Anon", by definition, has no identity, although I suppose the site "AnonAnalytics" will form a brand and reputation over time that may prove meaningful.

Interestingly in this case they address that fact, quite clearly stating that the reader should assume that "certain contributors... As well as their members, partners, affiliates, colleagues, employees... Have a short position in the stock of Huabao. Not something I would normally expect to see in an analysis of this nature. However it is in line with the anon brand to make people fully aware if the full implications of the report. Also the level of professionalism in this goes way beyond anything anon has previously produced. After all not many anon events require international flights and a 3 day trek to fInd a factory in Botswana.

A mild tangent here.

There's a school of thought that insider trading can be a good thing, because insiders with knowledge can profit by making large stock trades to bring a company's stock price in line with reality, and revealing to the world that they (an informed insider) think that the stock is overpriced (or underpriced). Any prospective investors can then use this information to make informed decisions about the purchase or sale of the stock.

So, as you reference altruism - altruism is nice, but - in the absence of fraud - profit is a really nice incentive.

(The main economic reason insider trading is illegal is that, in reality, this creates some horrible conflict-of-interest breach-of-fiduciary-duty scenarios. The main reason people want it to be illegal seems to be a sense that the stock market is a game and that everyone should be playing by the same "rules" so that they can't make a profit unless someone else can use a profit. Not that this encourages efficient markets in and of itself...)

Really good stuff. Can't believe they managed to take a picture of the company's hidden facility in Botswana.

Anon Analytics has potential. Interesting to see bonafide accountants calling themselves "Anon" (the whole thing is dripping with hints of IT competence as well :-)

I just read the report and agree that it was pretty thoroughly researched. I enjoyed reading about the acquisition strategy she used to cover up prior fraud. That said, some parts leave me feeling like something is off or maybe the report could have been more professional.

I wish they would just come out and say everything, full disclosure, instead of saying "well we found this but we don't even want to talk about it so we will let management comment".

I also would like to believe that the picture from Botswana is real but it would be just as easy for them to photoshop a picture as it was for management to do.

An "anonymous" short seller could very easily fabricate an entire report, photoshopping pictures and making up numbers then profit from the knee jerk reaction of the market before the report has be debunked.

edit: I also enjoyed the goldman "clients are muppets" reference in the disclaimer.

It's pretty clear the Botswana plant produces drugs but they didn't want to detract from the professionalism in the rest of the report by saying that. Their point is well made - the Chinese company has no business having a plant there, in such a remote and hard to reach location.

What drugs though? Illegal narcotics or faked pharmaceuticals.

This is an interesting way to influence a stock for sure. No marketing here, right? Just "Anonymous" striking again...

http://www.reuters.com/finance/stocks/chart?symbol=0336.HK

They seem to be going down at the moment. It would be interesting to see whether this report will actually have any impact on the stock.

Bloomberg cited the report as the reason for today's decline.

http://www.bloomberg.com/news/2012-04-24/huabao-shares-plung...

I don't know this company but now I'm curious - what's in the facility in Botswana?

The last page is the best page

Anon Analytics? You missed a perfect opportunity for:

Anonalytics

wow that's a whole other level of fraud.

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