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Muddy Waters refuses to explain why it shorted Solutions 30
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