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Muddy Waters: Sino-Forest Is “A Ponzi Scheme…Investing For The 23rd century”

MW’s Carson Block: It’s a Ponzi scheme in that the company perpetually issues securities in order to fund itself. Even by its own fraudulent numbers, the company does not generate any free cash and has not done so in sixteen years. Were the company be unable to issue additional securities to fund itself, it would collapse. That to me is the definition or epitomizes the definition of a Ponzi. “In this situation, the company appears to be investing for the 23rd century. It’s sixteen straight years burning cash, no guidance as to what the rationale is to acquire so many trees so far ahead of customer orders. This is taking a capex fraud–we have found several of these in China–it’s taking it to the next level where you’re not constrained by the walls of a factory and no one is able to really see the movement of physical goods. It could grow to be infinite provided that the capital markets continue to fund it.”

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99 Responses to “Muddy Waters: Sino-Forest Is “A Ponzi Scheme…Investing For The 23rd century””

  1. NakedShort says:

    Other than that does he have any concerns?

  2. NakedShort says:

    Other than that does he have any concerns?

  3. HFguy says:

    Oh.. how the might have fallen….

    in another note.. If a tree falls in a forest and there is no one around, does it make a noise?

    • Guest says:

      If the forest doesn’t have trees and nobody has seen the forest is it a forest?    

    • Guest says:

      If the forest doesn’t have trees and nobody has seen the forest is it a forest?    

    • trojan says:

      “Hey! If one of you falls in the forest, do you make a sound?”
      “Are you kidding? Steve fell down the other day and he hasn’t shut up about it since.”

  4. HFguy says:

    Oh.. how the might have fallen….

    in another note.. If a tree falls in a forest and there is no one around, does it make a noise?

  5. Texashedge says:

    So just buy Jan 2200 calls?

  6. Texashedge says:

    So just buy Jan 2200 calls?

  7. Paco says:

    Sí, no Forest ese-BNP Paribas Equity Analyst

  8. Paco says:

    Sí, no Forest ese-BNP Paribas Equity Analyst

  9. Guest says:

    I salute Carson Block for his good work.

    But Sino Forest is no different to many dotcom stocks during the go-go days. None of them generated any cash flows and they all promised their investors riches 12 months down the line, 12 months down the line, and 12 months down the line……………………………………….

    • Guess says:

      Do you know the difference between an unprofitable business and a fraud? It seems like you don’t.

      • Guest says:

        Why don’t you enlighten me? You have any solid evidence that Sino-Forest is a fraud?

        BTW, don’t quote from the Muddy Water report you cocksucker.

        The Guest above you

        • Guess says:

          Calling me a cocksucker AND preemptively excluding the MW report’s relevance? You are a master of rhetoric.

        • Guess says:

          Calling me a cocksucker AND preemptively excluding the MW report’s relevance? You are a master of rhetoric.

      • Guest says:

        Why don’t you enlighten me? You have any solid evidence that Sino-Forest is a fraud?

        BTW, don’t quote from the Muddy Water report you cocksucker.

        The Guest above you

  10. Guest says:

    I salute Carson Block for his good work.

    But Sino Forest is no different to many dotcom stocks during the go-go days. None of them generated any cash flows and they all promised their investors riches 12 months down the line, 12 months down the line, and 12 months down the line……………………………………….

  11. Lord Jewmongous says:

    Can I front end load your back end?

  12. Lord Jewmongous says:

    Can I front end load your back end?

  13. Guest says:

    Where’s the Dykstra update???

  14. Guest says:

    Where’s the Dykstra update???

  15. Brian1284 says:

    Groupon is running a UTA special on fall foliage trips to the Sino-Forest.  I picked up a dozen. 

    -guy who doesnt read financials-

  16. Brian1284 says:

    Groupon is running a UTA special on fall foliage trips to the Sino-Forest.  I picked up a dozen. 

    -guy who doesnt read financials-

  17. Brianwhite10128 says:

    pmco you goig to weigh in?

  18. Brianwhite10128 says:

    pmco you goig to weigh in?

  19. Guest says:

    The fact that John Paulson lost $500 million dollar proves that he´s truly not that genius media is telling us, since his mastermind Paolo Pellegrini left his firm, Paulson tries to handle and fix the risk. But he´s only above-averaging, not “godlike”.

    The time will come when John Paulson must close one of his crashed funds, you´ll see…

    Do you know where he started his career ? You guess at a Bulge Bracket ?

    Simply wrong, he did it at BCG…

  20. Guest says:

    The fact that John Paulson lost $500 million dollar proves that he´s truly not that genius media is telling us, since his mastermind Paolo Pellegrini left his firm, Paulson tries to handle and fix the risk. But he´s only above-averaging, not “godlike”.

    The time will come when John Paulson must close one of his crashed funds, you´ll see…

    Do you know where he started his career ? You guess at a Bulge Bracket ?

    Simply wrong, he did it at BCG…

  21. Guest says:

    Paulson will lose more money this year. He´s not a trader, he started his career at BCG, he better quit HF-business to found a PE-firm or Consulting group

    • Guest says:

      No one was listening to your insane ramblings the first time you left them- take a hint.

    • Paco says:

      I’m sure he has enough money to just retire and enjoy life at this point.

      What is with all the pissy, jealous commentariat today?

  22. Guest says:

    Paulson will lose more money this year. He´s not a trader, he started his career at BCG, he better quit HF-business to found a PE-firm or Consulting group

  23. Guest says:

    Free cash? Who cares about free cash?  My company NEVER throws off free cash yet I still have people lining up at the doors to give me money.

    -Timmy

  24. guest says:

    There was a big mixup.  JP loves him some bar games.  He told his analysts, go invest in Golden Tee.  They thought he said “gold and trees”. 

  25. UBSsucksguy says:

    John Paulson lost $500 million in chinese fraud company

    LOL

  26. CS says:

    SINO FOREST——————–>SEE NO FOREST 

    Wow, big surprise

    Congratulations John

  27. Anal_ist says:

    All you fucktard investors kept giving me 10’s of billions. Do you think I have time to waste worrying about a few hundred million, bitches? Go bother Falcone.
    Peace,
    JP

  28. upstate guest says:

    carson block’s credential are tenuous at best, i’m pretty sure he’s a disbarred lawyer . he’s a corporate shakedown artist in the same mold as al sharpton or jesse Jackson.  he approaches copany xyz and says I can write one of two report…you can pay me to write the good kind or i’ll short you and i’ll write the bad kind.  his father’s company wab capital did the same thing.  like father like son.  i’m somewhere between hoping he’s indicted on securities fraud by the sec or disappears in mainland china.  he’s a slimly little cock sucker.

    • Anal_ist says:

      He may be “slimly.” And, he may try to extort companies, but it appears he has been right a few times.

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