Olam -- sell

Yes. MuddyWater DOES ITS HOMEWORK WELL, and substantiate their assertions with facts and figures based on in-depth investigation. We need to be aware that their investigations are conducted without any cooperation from the company, and can sometimes be very dangerous. To label their investigation as sneaky or unglamourous is really unfair. Even if their assertions are found to be not totally true, they have done the investmemnt public a favour by putting the management on guard, and will inevitably lead to better corporate governance. Salute, MuddyWater.

"...Even if their assertions are found to be not totally true, they have done the investmemnt public a favour...".
MW did all these for their own benefits. You really believe they did these for YOU?? Haha, so naive thinking! Why dun you read the point-to-point rebuttal (factual) by OL to hv an understanding of the business type and model of the company. I'm not vested but is considering going in now. Maybe I hv to thank MW for pushing the price down. But I'm very sure they dun do it for me. And that's the fact too!  

I'm not vested. But one shouldn't selectively quote a liner n mislead everyone of the actual facts & recommendations of the UOB report. Here is the full report.... (OLAM SP/BUY/S$1.56/Target: S$2.38) FY12F PE (x): 10.3 FY13F PE (x): 7.7 We believe the report premised on Olam's insolvency, which in our opinion is unlikely unless there is outright fraud. A warning is issued on Olam's requirement to raise or refinance up to S$4.6b over the next 12 months to stay solvent. However, we note that this number quite likely includes short-term revolving facilities of S$3.7b and S$1b for trade financing and capex respectively. Interestingly, this number would have been higher as at end-FY11 at over $5b on the same measure and on a much smaller equity base. The question is whether such a measure is valid in the first place. In addition, certain issues such as accounting restatements which have previously been brought up by others have already been addressed by the company. In our view, investors should value Olam as a going concern. There are issues highlighted regarding overpayment and misleading investors, which Olam should address in its response to the report. However, these issues alone are not likely to cause Olam face solvency issues. Olam refutes allegations. Following the report, Olam has issued a statement that its accounting practices are fully compliant with international accounting standards, and are drawn up in accordance with the provisions of the Companies Act and Singapore Financial Reporting Standards. It will provide a fuller response in due course. Olam also intends to "hold Muddy Waters accountable for their damaging actions". We await further developments and detailed updates from management before reviewing our estimates or recommendation. Our BUY recommendation and target price of S$2.38 remains unchanged and pegged to 13.5x average FY13F/FY14F PE (core earnings). Valuations on a P/B basis remain attractive at close to -2SD levels and below global financial crisis lows.

Olam: CLSA note that just 24 hours after Muddy Waters (MW) posted their 133page report, Olam has responded with their own 45pg refutation. Digging through the details, and house is happy to see an increased level of transparency within Olam’s announcements that believe would help address much of investors’ concerns. In their report,
Olam focussed on explaining 4 key issues: their funding requirements, accounting issues, viability of business model, and the supposed difference between announced and recorded spending on acquisitions and capex. House see the explanation as providing quite a bit of detail into Olam’s day-to-day operations.
Given Olam’s clarification and openness in providing such sensitive information, house believe this would have a positive effect on investor’s confidence in the co and think that the burning issues have mostly been answered in a relatively clear fashion.
Meanwhile Olam note that the Co.is preparing another report which will go into even more detail to rebut the allegations.

I did not read of any support from Temasek Holdings(TH) except that its new spokesman (one ex-SIA guy named Forshaw)said TH had no comments and to address queries to OLAM!!! What a joke!

Olam share price has fallen but probably not as much as what MW would have loved to see. What if MW & its hedge fund cronies lose their pants? Shorting, as you should know, involves borrowing stocks and that costs fees. Good luck to them.