Anonymous Correctly Predict The De-listing $1B Company

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.<p><a href="http://www.scribd.com/doc/66444803/Chaoda" rel="nofollow">http://www.scribd.com/doc/66444803/Chaoda</a>

Disclaimer: I know nothing of Choada, and for all I know, they'r a fraud. However, I have some problems with this report.<p>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.<p>2) Ok, so some auditors left, and some executives left. This happens to companies. Certainly cause for some investigation, but not necessarily red flags.<p>3) There's heavy insider trading happening. This is less regulated/enforced in China. That's bad, but commonplace.<p>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.<p>5) Inflated capital spending can be a sign of growth (lease acquisitions, etc.)<p>The descriptions of "shell companies," that follows all strike me as sensational, and not necessarily substantial.

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.<p>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.

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.

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.<p>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.

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].<p>[1]<a href="http://www.4-traders.com/CHAODA-MODERN-AGRI-1412696/news/CHAODA-MODERN-AGRI-26-Sept-2011-Suspension-of-Trading-13811271/" rel="nofollow">http://www.4-traders.com/CHAODA-MODERN-AGRI-1412696/news/CHA...</a><p>[2]<a href="http://www.bloomberg.com/news/2011-09-26/chaoda-modern-agriculture-subject-of-hong-kong-market-misconduct-lawsuit.html" rel="nofollow">http://www.bloomberg.com/news/2011-09-26/chaoda-modern-agric...</a>

Someone at the FT has interviewed them:<p><a href="http://blogs.ft.com/fttechhub/2011/09/anonymous-analytics/#axzz1ZBV7fZgk" rel="nofollow">http://blogs.ft.com/fttechhub/2011/09/anonymous-analytics/#a...</a>

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

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

Anon should perform a similar evaluation of Groupon.

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.

Is this how one might build a vapour startup corporation and cash out. I am not advocating this. I am curious.<p>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.<p>Is this how the game works?!? What am I missing?

If I read a leak about a company's impending doom, then short a bunch of its stock, is this considered insider trading?<p>Seems like it would be, and I'd be at risk of going to jail.

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

So can we expect some Aonony Pony Rating Agency anytime soon? Like as a replacement for Moodys and S&#38;P?

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.<p>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.

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.

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

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

"...based on the evidence in this report ,as well as information we have decided not to release, we believe Chaoda may face delisting."<p>Read: this report is bullshit.