Replies to post #44671 on China Growth Stocks

[ratobranco]

ONP - I'm just bothered that if MW is wrong in the fraud claim, and I think the odds say they are wrong at this point (the market certainly seems to be shifting its vote that way) that there won't really be consequences for them.

What can be done? They've probably already covered the short--maybe even gone long, as they said they might. That's total crap. We don't have any sort of regulations that prevent activity like that.

You can short a stock, then yell "fire" in a crowded theater, and there is no way to undo the benefit you wrongly created for yourself, and the harm you wrongly created for others. After all, whoever yells can play reg FD and say "I am short" and "I am just expressing an opinion" and "due your own DD", thus eliminating legal responsibility. Whether or not their opinions turn out to be true, they will still make money, simply from the panic.

The question is, can we have free expression and yet still have markets that function cleanly and fairly? The profit motive is very dangerous--people will do all kinds of sleazy shit if they can make money. A line obviously needs to be drawn somewhere, that's all I'm saying.

If these guys are wrong, I think they should be held financially accountable to the shareholders who have been harmed by their actions. At a minimum, they should have to give up their short profits.

Thoughts?

[derek2000]

ONP - Muddy Waters

Brad, It is interesting that you mentioned that positive people only look into the numbers. Here are something else to consider:

- Muddy Waters was form in June, the same month as its first equity report.

- Muddy Waters' first report is to "expose" ONP as a fraud, AFTER the company turned down its offer to write a paid research - presumably a positive one. I found that there is a major ethic issue here and it casts major doubt in any of MW's claims.

- Rick Pearson and Eric Jackson both visited the same facility, and both came out with glowing assessments exactly opposite of MW. Rick was at the same place, at the same time as MW (very strange coincidence, or there was some kind of coordination between them.)

- MW's home office is an address in HK, and it is registered in NV, and its two person team lives in Mainland China and they operate totally separate business. While I am all for a highly mobile workforce, and the needs for virtual office, i could not help but thinking that MW's existence is created purely to commit security fraud. HK, being neither mainland, nor US, is a perfect place to hide if ONP choose to take legal actions.