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Short selling
blacksheep
post Posted: Yesterday, 02:19 PM
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FRAUD, COCKROACHES AND BULLSHIT

Famed activist short seller Carson Block pulls no punches as he takes aim at Canada, Jack Ma and the U.S. pharmaceutical industry in this interview with Brian Price. Block, who serves as CIO of Muddy Waters Research, discusses the red flags he looks for when hunting for fraud, and reveals which companies are currently on his radar. Carson also touches on how his line of work has led to both tremendous success and death threats. Filmed December 4, 2018 in New York.

Watch the video below
https://www.realvision.com/spotting-fraud-c..._Carson%20Block



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Dec 8 2018, 01:53 PM
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In Reply To: blacksheep's post @ Dec 7 2018, 08:27 PM

extract - Aphria fallout: 5 takeaways on the report that sent this cannabis stock plunging - https://mjbizdaily.com/aphria-cannabis-stock-plunging/
Published December 6, 2018 | By Lisa Bernard-Kuhn and Matt Lamers

QUOTE
But some of the concerns raised by the short-seller report could have broader implications for the rapidly growing cannabis industry, analysts and observers say.
“This could be the proverbial straw that breaks the camel’s back,” said Chris Damas, editor of BCMI Cannabis Report.

“The overvaluation case (for the Canadian licensed producers) could finally be resonating with investors, and it takes something like this to break down the floodgates.”

As the fallout evolves, here are five key takeaways for investors and cannabis operators to consider:

1. Not Aphria’s first red flag

This isn’t the initial harsh report issued by Hindenburg on Aphria.

In March, the firm released a report claiming it uncovered “rampant red flags” in its review of Aphria’s acquisition of Nuuvera for 826 million Canadian dollars ($669 million at that time).

The deal raised eyebrows among industry observers after it was reported Aphria’s chief financial officer and six directors owned shares of Nuuvera before the deal. Those details had not been previously disclosed to shareholders.

A month later, Aphria adopted new guidelines for its top leadership on investing in outside companies.

In the most recent report, the short sellers claim that Aphria overpaid for assets in the Caribbean and Latin America that were secretly controlled by “insiders” and are “largely worthless.”

The report’s researchers claim they performed “extensive on-the-ground” due diligence on recently acquired properties in Jamaica, Colombia and Argentina and found the deals to be “vastly inflated or outright fabrications.”

In one example, the report alleges that assets acquired in Jamaica for CA$145 million ($108 million) were “an abandoned building that was sold off by the bank earlier this year.”

Officials with Quintessential Capital Management and Hindenburg Research could not be reached for comment.

To the knowledge of Marijuana Business Daily, the claims detailed in the reports on Aphria have not been independently verified.

2. Bigger than Aphria

The accusations could have broader implications for the industry and call into question just how much due diligence occurs as cannabis companies embark on their rapid expansions, said Andrew Kessner, an analyst with New York-based investment advising firm William O’Neil.

“Things have been moving so quickly in this space that a lot of companies have gotten a pass as far as what they’ve been spending their money on and why,” he said. “I think investors are starting to wise up and ask, ‘What’s really under the hood?’

“Are these executives really being good stewards of investor capital or are they inflating their company’s position to bring up valuations and do another round of funding?”

Damas agreed.

“It’s this sort of thing that could be the crack in the dike – so to speak,” he said. “It’s going to have ramifications for the whole industry.

“Other people are going to start taking a look at those assets that are far and away and wonder if they’re really worth what management is paying.”

3. Reassessing international plays

Aphria’s stock selloff could also signal just how critically investors view the international footprints of Canada’s larger cannabis producers, Kessner said.

“These companies have used the Canadian (capital) markets as a launching pad to raise money based on their plans to grow internationally,” he said.

“If that growth story – of being a global player – gets shot down, then their valuation begins to make no sense.”

Analysts at both GMP Securities and Bank of Nova Scotia moved their ratings for Aphria to “under review” after the short-seller report.

“We believe that management’s credibility may have been impacted by the allegations raised in this report,” GMP analysts wrote in a note to investors. “It is unclear at this point how the company will re-establish trust with investors.”

4. Assessing Aphria’s response

Since the short-seller report went public Monday, Aphria has issued two public responses.

In one statement, the company called the allegations “malicious,” adding that “by their own admission, Hindenburg Research ‘… stands to realize significant gains in the event that the price of any stock covered herein declines.’”

Officials with Aphria could not be reached for comment Wednesday.

Whether Aphria’s response will resonate with investors remains to be seen, Kessner said.

“Any stock is subject to short sellers. If the case being made by a short seller doesn’t have any merit, then that will come out,” he added.

“But simply saying, ‘These are short sellers and they’re just doing it to make money’ doesn’t mean much for anyone.”

5. Regulators taking notice

Meanwhile, Canada’s stock market regulator has issued a warning to publicly traded companies in emerging industries such as cannabis against “problematic promotional activities” aimed at artificially increasing share price.

The notice – issued by the Canada Securities Administrators (CSA) – did not single out any cannabis companies, but experts say many of the practices the memo warns against have been observed in the industry.


Jason Zandberg, analyst at PI Financial in Vancouver, British Columbia, said unscrupulous actors making unsubstantiated claims to benefit stock prices is part of any rising equity market.

“There is no doubt that cannabis has been one of those rising-tide moments and there have been many misleading promoters abusing the widespread investor enthusiasm,” he said.

“I hope the (CSA) does more than just release notices to limit these practices.”




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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Dec 7 2018, 08:27 PM
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In Reply To: blacksheep's post @ Dec 4 2018, 02:04 PM

More stunning allegations - Aphria Part 2: We Believe This Rot Runs Deep - Published on December 6, 2018

QUOTE
As short-biased investors, people often apply a level of skepticism and scrutiny to our work based on an understanding of our incentives. That’s totally fair and we welcome it. A lively, well-informed debate makes for a vibrant market and ultimately benefits everyone.

Often lost in that debate is the role of sell-side research and where the incentives of bankers are pointed. Following our report on Aphria’s LatAm acquisition, several banks either voiced meaningful reservations or placed Aphria’s ratings under review in order to take time to assess our research. We noticed, however, that one bank stood rather starkly at odds with the others.


https://hindenburgresearch.com/aphria-part-...-rot-runs-deep/

Amazing how much ammo short sellers get from following their targets instagram accounts

"rockstars" biggrin.gif

Liberty Health Sciences Responds to Short-Seller Report

https://www.newcannabisventures.com/liberty...-seller-report/
https://twitter.com/DeFrancesco_A?ref_src=t...7Ctwgr%5Eauthor



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Dec 7 2018, 09:39 AM
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Posts: 5,115
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In Reply To: blacksheep's post @ Dec 5 2018, 02:17 PM

Seems the market agrees (for the moment at least) with AGH's CEO - AGH SP up currently 24% @ 23c. Time will tell
Pot shot: how a local marijuana importer is embroiled in a US short seller attack
QUOTE
Althea chief executive and largest shareholder Josh Fegan said he didn't expect the allegations against Aphria would have any impact on his company.

https://www.afr.com/business/banking-and-fi...20181205-h18qwb




--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Dec 5 2018, 03:30 PM
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Carson Block, the CIO of Muddy Waters Research, speaks to Yahoo Finance’s Julia La Roche at the Kase Learning Shorting Conference in New York.

QUOTE
According to Block, numerous players in the capital markets have inadvertently allowed bad behavior.

“Most of America is missing the role American capital markets play in enabling this egregious behavior,” he said.

Many of these executives are incentivized with their compensation in stock, Block noted. They benefit from higher stock prices and when they cash out of their shares.

Long-oriented investors should realize that they “publicly support companies” by providing the bid and contributing to those bad behaviors, he explained. It’s important that they understand their role, Block stressed.

On the sell-side, Block says that analysts who cover these stocks need to be held accountable for the research and calls they make. After presenting their appeals to investors, Block says, short-sellers should resort to calling them out, not by their firm, but by their name.

“I think really the key here for activist short sellers is to name individual names on Wall Street,” Block said. “A lot of activist short sellers in the past would have said ‘Goldman Sachs this or UBS that.’ Nobody has really talked about who is the analyst who put out the buy recommendation? Who is the portfolio manager who decided to upsize their investment in the face of news that the company may have really crossed the line? And I think that’s what we as activist short sellers if we’re going to engage in morality campaigns is that’s what we really have to focus on is individual accountability.”


https://finance.yahoo.com/news/carson-block...-203632085.html

To check out the other presenters at the Kase Learning Shorting Conference see links here - https://twitter.com/KaseLearning



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Dec 5 2018, 02:17 PM
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In Reply To: blacksheep's post @ Dec 4 2018, 03:53 PM

Surprised AGH hasn't called a TH, or at the very least put out an announcement regarding Aphria. Apparently, Aphria is in a TH and AGH's SP is down another 12.5% today.



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 


blacksheep
post Posted: Dec 4 2018, 03:53 PM
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In Reply To: blacksheep's post @ Dec 4 2018, 02:04 PM

QUOTE
Has had an impact on the entire cannabis sector.


Including ASX listed AGH, which is down 26.15%

QUOTE
LEAMINGTON, ON, Sept. 20, 2018 /CNW/ - Aphria Inc. ("Aphria" or the "Company") (TSX: APH and US OTC: APHQF) today announced that its Australian-based partner Althea Company Pty Ltd. ("Althea" or the "Australian Company") has successfully completed the fund raising for its proposed listing on the Australian Securities Exchange ("ASX") via an Initial Public Offering ("IPO"). Demand for shares in Althea significantly exceeded the proposed maximum fund raising under the IPO of AUD$19.65 million.

Aphria took a cornerstone position in the IPO by subscribing for an additional 17 million shares which has resulted in a 25% holding in Althea (AUD$3.4 million investment). Having previously invested AUD$5 million in pre-IPO funding, Aphria continues to be hands-on in support of Althea's growth strategy in Australia.

Through a previously announced exclusive supply agreement with Aphria, Althea commenced importing and supplying five co-branded medicinal products to eligible patients in Australia in cannabis oil and dried flower form, generating sales revenue starting in May 2018.

"We are thrilled that our Australian partner has successfully listed on the ASX, and we are looking forward to continuing our work with Althea to realize the market's potential and ensure that Australian patients have access to high-quality medical cannabis," said Gregg Battersby, Vice President of Commercial Strategy at Aphria.

"Althea's aim is to educate and support patient access to medicinal cannabis in Australia and our measured three-stage growth plan supports our vision to become a leading and trusted medicinal cannabis brand," said Joshua Fegan, CEO and Managing Director of Althea.

"Funds from the IPO will enable Althea to increase brand awareness for our co-branded medicinal cannabis products in the medical community and also fund the design, construction, commissioning and completion of a fully scalable 4,080m² medicinal cannabis cultivation, extraction and manufacturing facility," Fegan added.

"Althea wish to acknowledge the ongoing support received from our Canadian partner Aphria, whose dedication to the Australian medicinal cannabis market is unrivalled."




--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Dec 4 2018, 02:04 PM
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Posts: 5,115
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In Reply To: blacksheep's post @ Dec 4 2018, 12:53 PM

Has had an impact on the entire cannabis sector.

Pot Stocks Retreat as Aphria Short Report Offsets Upbeat Market
QUOTE
By Kristine Owram
December 4, 2018, 2:13 AM GMT+11
A broad market rally wasn’t enough to boost cannabis stocks Monday as the sector retreated on a short-seller report that called Aphria Inc. a “black hole.”

Aphria plunged as much as 29 percent, the biggest drop since Feb. 2013, after Quintessential Capital Management founder Gabriel Grego told a New York conference that the company has diverted about half of its net assets into inflated investments held by insiders. The pot sector also slid on the news, with the Horizons Marijuana Life Sciences Index ETF falling 4.4 percent at 10:10 a.m. in Toronto.

https://www.bloomberg.com/news/articles/201...s-upbeat-market

A rebuttal is being prepared by the company

QUOTE
"The company is preparing a comprehensive response to provide shareholders with the facts and is also pursuing all available legal options against Quintessential Capital.” — Tamara Macgregor, Aphria spokesperson




--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Dec 4 2018, 12:53 PM
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Incredible if true

QUOTE
Stock in leading Canadian cannabis producer Aphria was taking a nosedive Monday, as the company denied allegations by a short seller who said it had spent more than $200 million to acquire overseas companies of little value that were previously owned by Aphria insiders.

In a presentation at a short-selling conference Monday morning in New York, hedge fund manager Gabriel Grego said his visits to the sites of three Aphria acquisitions in Jamaica, Colombia, and Argentina showed abandoned properties or tiny entities that Aphria trumpeted as its entries into those national markets

Grego urged attendees of the KASE Learning Shorting Conference in New York to sell Aphria’s NYSE-listed stock (ticker: APHA).
Valued on the New York exchange at $2 billion, Aphria has been one of darlings of the Canada’s cannabis industry. Like many of its marijuana peers, Aphria has enjoyed a stock market capitalization that’s nearly 100-times its trailing 12-month sales. Aphria stock closed down more than 23% on Monday, to $6.05 per share. More than 35 million shares changed hands, more than 13 times the recent average daily volume.
.


https://hindenburgresearch.com/aphria-a-she...ss-on-the-side/



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Nov 15 2018, 11:08 AM
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Blue Orca Capital (Soren Aandahll - formerly Glaucus Research of ASX QIN and BLA "fame") has issued a new short report on PDD:NASDAQ Pinduoduo Inc.
https://www.bloomberg.com/news/videos/2018-...pinduoduo-video

https://www.blueorcacapital.com/



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
 


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