Anonymous Correctly Predict The De-listing $1B Company

http://nerdinvest.blogspot.com/2011/09/anonymous-analytics-correctly-predict.html

by rajpaul • 15 years ago

175 52 15 years ago

nerdinvest.blogspot.com

sudonim• 15 years ago

The headline is a little awkward, but the interesting thing here is that Anonymous is now doing analysis on the books of corporations. It's unclear how much of this is based on public information vs. leaked information, or really what the goals are.

However, the twitter tag line "Taking down corporations for the lulz" reads as though it's indiscriminate, and not just targeting organizations deceiving the public or breaking the law.

wanorris• 15 years ago

It's worth mentioning that the value of releasing a properly timed anonymous analysis report on a company could be enormous for a properly positioned market player. If you research a company, discover fraud like this, take a massive short position, then release the information you gathered to someone like Anonymous for them to disseminate, you could potentially make billions, depending on the liquidity of the stock.

In short selling, one of the great risks is that the company you have identified as troubled will not collapse during the window of time for which you have shorted it. Something like this would completely solve that problem -- and better yet, without any direct, traceable links between you as the investor and you as the research originator, so the risk of being caught on some kind of insider trading charge is minimized.

notaddicted• 15 years ago

Even publishing the research yourself would not constitute insider trading, as long as the information was honestly come-by.

A similar thing was done by Mark Cuban in '07: http://www.wired.com/techbiz/people/magazine/15-10/mf_shares... http://sharesleuth.com/

0x12• 15 years ago

So, anonymous is now in the business of giving - accurate - investment advice. That's an interesting development. So, did they clean up on this or did they not trust their own judgment?

If they keep making predictions like that they're going to be watched a lot more closely than they already are.

burgerbrain• 15 years ago

"So, did they clean up on this or did they not trust their own judgment?"

I believe there is a 3rd option there...

JonnieCache2• 15 years ago

"So, did they clean up on this or did they not trust their own judgment?"

The answer to this is one that is oft-repeated: there is no "they" here.

The people behind this new Anon Analytics faction probably had no involvement with anon before this, my guess is that they are people who have been working with/in the markets for years and have wanted to do something like this, and have decided now to do it under the banner of anonymous, for whatever reasons.

rhizome2• 15 years ago

I'm a little skeptical when their blogroll consists only of a "miracle vitamin" site.

rajpaul2• 15 years ago

I understand why you might say that, on the surface it does look cheesy. But the "miracle vitamin" site is blog run by an optometrist and the article references a per-reviewed study.

"A recent study in the journal Archives of Ophthalmology concludes that high vitamin D intake reduces the risk of developing age-related macular degeneration (AMD) in women under 75 years of age."

http://seeforlife.blogspot.com/2011/09/miracle-vitamin-gets-...

ErrantX• 15 years ago

Given the, uh, spelling commonalities (mistakes..) on both, I am going to guess both blogs might be the same person :)

rhizome2• 15 years ago

Advertising Vitamin D as a "miracle vitamin" is sketchy behavior, as would calling wheat a "miracle grain."

scottostler• 15 years ago

Who would have guessed Anonymous could act as a trading signal?

DrJ• 15 years ago

invest in stocks for masks.

mattmanser• 15 years ago

Someone at the FT has interviewed them:

http://blogs.ft.com/fttechhub/2011/09/anonymous-analytics/#a...

JonnieCache2• 15 years ago

Make sure you read the actual report to get an idea of the depth of analysis they've performed, it's not really given enough promenance in the linked article.

http://www.scribd.com/doc/66444803/Chaoda

alastairpat2• 15 years ago

I didn't read it until I saw this comment - the report is remarkably in-depth and demonstrates an intimate knowledge not only of the company but also of accounting/audit principles.

Anonymous (if it's correct to refer to them as a unified organisation) is certainly diversifying from DOS attacks…

starpilot• 15 years ago

This work is so far out of left field for anon, I'd be surprised if it was more than one person. The report is concise and coherent, a step above previous missives left by the group. I'm almost certain it's the work of a single young analyst at an established firm. Otherwise they've made a very structured entrance into financial analysis, impressive given their usually decentralized and distanced nature.

I'll say that even my engineering team technical reports in university, among students who met face to face during the week, usually did not sound as cohesive as this report.

Natsu• 15 years ago

Did anyone else think it was weird that so many of the executives who left Chaoda seemed to end up working for Le Gaga?

aresant• 15 years ago

Acting on non-public information constitutes insider trading - wonder if this qualifies.

redthrowaway2• 15 years ago

If it's published OTI, you can make a pretty safe claim that it's public. Otherwise, people who short a company based on a newspaper article accusing the CEO of gross misconduct would be guilty of insider trading.

anamax• 15 years ago

> Acting on non-public information constitutes insider trading - wonder if this qualifies.

No. It's often legal to trade on non-public information. See http://en.wikipedia.org/wiki/Insider_trading .

steve8918• 15 years ago

This is pretty interesting, however, one thing to note is that the company is at 2.50HKD, which is roughly $0.30 USD, so it's not much of a leap to suggest this is going to get delisted.

But I'll be interested to see what other things this site comes up with. If they become like Muddy Waters, which uncovered the biggest Canadian fraud with Sino-Forest, since Bre-X, that would be pretty interesting.

mcphilip• 15 years ago

Where is there any evidence of the stock being delisted? All I can find are stories related to suspension of trading yesterday, a far cry from delisting[1][2].

[1]http://www.4-traders.com/CHAODA-MODERN-AGRI-1412696/news/CHA...

[2]http://www.bloomberg.com/news/2011-09-26/chaoda-modern-agric...

apaprocki• 15 years ago

The CFO and a manager at Fidelity were accused of insider trading:

http://www.businessweek.com/news/2011-09-28/chaoda-chairman-...

debt• 15 years ago

Anon should perform a similar evaluation of Groupon.

castewart2• 15 years ago

How do we know Groupon isn't anon?

shithead• 15 years ago

That turd already stinks so bad the banksters will give it a wide berth upon flush, lest they be slammed with lawsuits for negligence.

dredmorbius• 15 years ago

In order to be de-listed, a company must first be listed.

Jgrubb• 15 years ago

And Goldman.

DevX101• 15 years ago

It looks like they took short positions in the firm before releasing the report. They may gain a significant profit from this, which I think is perfectly fine as all of the information here is public (but not necessarily easily accessible) information.

flipbrad• 15 years ago

I suppose whoever matched their bet is going to whatever lengths they consider necessary to find out who they are so they don't offer them any new shorts!

etrain• 15 years ago

Disclaimer: I know nothing of Choada, and for all I know, they'r a fraud. However, I have some problems with this report.

1) So they think they spotted a fraud. This has been happening a LOT lately in China. These days, it's not so hard for bears to do this to a good company and force delisting, even if the company is actualy solid.

2) Ok, so some auditors left, and some executives left. This happens to companies. Certainly cause for some investigation, but not necessarily red flags.

3) There's heavy insider trading happening. This is less regulated/enforced in China. That's bad, but commonplace.

4) The statistical analysis on page 13/14 is extremely weak. On p 14 they've done little more than turn the chart on p13 sideways and throw on some confidence intervals. Smoothing profit margins is something that good management often does. I wouldn't say that it points to fraud.

5) Inflated capital spending can be a sign of growth (lease acquisitions, etc.)

The descriptions of "shell companies," that follows all strike me as sensational, and not necessarily substantial.

jimrandomh• 15 years ago

Is there reason to think this is one of the same anonymous people as in any other news stories? This sounds like a lower-case-a anonymous person, probably an investor who's taken a short position on this company, or an insider.

redthrowaway2• 15 years ago

Big logo on their homepage.

http://anonanalytics.com/research.php

jeffool• 15 years ago

The possibility of them being the "same anonymous people" is inconsequential, and very unlikely. The very point of Anonymous is that anyone can be them.

(If that's even what you were asking.)

icebraining• 15 years ago

Exactly. To be part of Anonymous you just need to say you are. And be actually anonymous, of course.

castewart2• 15 years ago

"...based on the evidence in this report ,as well as information we have decided not to release, we believe Chaoda may face delisting."

Read: this report is bullshit.

gnu6• 15 years ago

Hopefully Anonymous will use their new capability to destroy morally bankrupt companies, such as the financial companies that refused to handle funds for Wikileaks.

droidcoder2187• 15 years ago

Is this how one might build a vapour startup corporation and cash out. I am not advocating this. I am curious.

I start by listing a vapour startup corporation. People who like to gamble, I mean invest, buy stocks in the corporation. I pay the "brass" (CEOs, etc... and me the founder) high wages and pensions, just like most other corporations. Then the corporation, having no revenue (other than those "investments") declares bankruptcy and delists.

Is this how the game works?!? What am I missing?

Empedocles99• 15 years ago

The part you are missing is how do you get such an obviously fraudulent company listed in the first place?

stfu• 15 years ago

So can we expect some Aonony Pony Rating Agency anytime soon? Like as a replacement for Moodys and S&P?

rdtsc• 15 years ago

This has been done in the past but by digging through CEOs' history. For example a good number of them put fake school credentials on their resume.

Someone would go to the university and search their records and sometimes find CEOs lied. He then would take a short position in company's stock (if publicly traded) and release the info. Sure enough, the stock would drop, and he would gain. SEC didn't like but I think the was nothing they could do as it was technically public information.

vbar• 15 years ago

It's still being done - see e.g. http://www.muddywatersresearch.com - and there's no reason an outfit like that couldn't publish a report as Anonymous...

aneth• 15 years ago

There is nothing wrong with this either. It's trading based on research of publicly available information - exactly what you should be doing.

nestlequ1k• 15 years ago

If I read a leak about a company's impending doom, then short a bunch of its stock, is this considered insider trading?

Seems like it would be, and I'd be at risk of going to jail.

scq• 15 years ago

IANAL, however:

Nope, insider trading is where you take advantage of non-public information. If the information was leaked, it would then be public.

dhimes• 15 years ago

What if you are active in publicizing that information. Does that make you complicit in some sort of improper profiteering?

EDIT: I know you said you weren't a lawyer but I thought I'd put it out there for someone.

jcfrei• 15 years ago

what strikes me as kind of strange is that anonymous uses google analytics to track their stats. I'm sure setting up a google account with a fake phone number isn't that much of a hassle, still I would have expected differently from such an allegedly high profile organization.

Anonymous Correctly Predict The De-listing $1B Company

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