London
US SHORTSELLER Carson Block is making the case that investors lose out if sceptical analysts are afraid to speak publicly. He's focusing on Solutions 30, the Luxembourg technology-services company that plunged this week.
Mr Block's Muddy Waters Capital disclosed last Saturday in a regulatory filing that it was shorting Paris-listed Solutions 30, but it didn't follow its usual practice of publicly discussing the reasons why.
No matter: The stock plunged 25 per cent on Monday. Muddy Waters has been under scrutiny from regulators in France after publishing a report in 2015 detailing its bearish investment thesis for Casino Guichard-Perrachon and Rallye.
"Whose investors are better off - those who can evaluate our arguments, or those whose stock drops but they don't understand why?" Muddy Waters asked in a tweet late on Tuesday.
Some European regulators, pre-sented with allegations by short- sellers that companies have engaged in dodgy accounting or inadequate disclosure, have responded by investigating the bearish investors for causing a share price fall. Mr Block is among the shortsellers pushing back.
Germany's financial watchdog temporarily banned further short sales of fintech Wirecard in February, while prosecutors widened a probe to include a journalist at the Financial Times after the newspaper began publishing a series of articles alleging fraud at Wirecard's Singapore unit.
Solutions 30 rose for a second day on Wednesday, but is still trading below the level before Muddy Waters' short position was revealed. BLOOMBERG