
Anonymous Correctly Predict The De-listing $1B Company - rajpaul
http://nerdinvest.blogspot.com/2011/09/anonymous-analytics-correctly-predict.html
======
JonnieCache
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>

~~~
alastairpat
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
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.

~~~
adrianwaj
On the last page of the report it mentions many people working on it, but
unaware of the final product, but with the team being rewarded. It also
mentions a codeword to decrypt source information that they'll release should
the team be threatened. As the team met with the company, the company may well
have identified them by now, or narrowed it down.

Add:

The team obviously (re)branded themselves Anonymous to take any heat off their
own identities or firm, whilst also giving the report a publicity boost within
the context of the newly setup <http://anonanalytics.com/> \- they also have
some technical know-how to encrypt the data: that may have come from more
conventional Anon members. Also, being part of Anonymous may scare the target
firm's executives into not retaliating - that's smart.

~~~
wnight
> The team obviously (re)branded themselves Anonymous to take any heat off
> their own identities [...]

That's all I did when I joined various anti-Scientology protests. It's not
like anyone is an official member.

> Also, being part of Anonymous may scare the target firm's executives into
> not retaliating - that's smart.

It is. Attacking them will look like attacking Wikileaks and will only
strengthen Anonymous's cred, legal and otherwise.

------
etrain
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.

------
rdtsc
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
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...

------
DevX101
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
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!

------
sudonim
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
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
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://www.wired.com/techbiz/people/magazine/15-10/mf_sharesleuth?currentPage=all)
<http://sharesleuth.com/>

------
mcphilip
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...](http://www.4-traders.com/CHAODA-MODERN-
AGRI-1412696/news/CHAODA-MODERN-AGRI-26-Sept-2011-Suspension-of-
Trading-13811271/)

[2][http://www.bloomberg.com/news/2011-09-26/chaoda-modern-
agric...](http://www.bloomberg.com/news/2011-09-26/chaoda-modern-agriculture-
subject-of-hong-kong-market-misconduct-lawsuit.html)

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

[http://www.businessweek.com/news/2011-09-28/chaoda-
chairman-...](http://www.businessweek.com/news/2011-09-28/chaoda-chairman-
fidelity-manager-accused-of-insider-trading.html)

------
mattmanser
Someone at the FT has interviewed them:

[http://blogs.ft.com/fttechhub/2011/09/anonymous-
analytics/#a...](http://blogs.ft.com/fttechhub/2011/09/anonymous-
analytics/#axzz1ZBV7fZgk)

------
0x12
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.

~~~
JonnieCache
_"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.

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

~~~
rajpaul
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-...](http://seeforlife.blogspot.com/2011/09/miracle-vitamin-gets-more-
miraculous.html)

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

~~~
rajpaul
No, the optometry site is my sister in-law's :P

~~~
scottkrager
Upvote for honesty at least.

------
debt
Anon should perform a similar evaluation of Groupon.

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

------
jimrandomh
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.

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

------
droidcoder2187
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
The part you are missing is how do you get such an obviously fraudulent
company listed in the first place?

------
nestlequ1k
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
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
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.

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

~~~
DrJ
invest in stocks for masks.

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

------
steve8918
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.

------
jcfrei
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.

------
gnu6
Hopefully Anonymous will use their new capability to destroy morally bankrupt
companies, such as the financial companies that refused to handle funds for
Wikileaks.

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

~~~
redthrowaway
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.

------
castewart
"...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.

