Wednesday, September 14, 2011

Chart of the day is...

..Silvercorp (SVM) ( ten day chart.


Subscribers: You'll get a Flash update that mentions the action in this stock in a few minutes. Enjoy the rest of your day, people.

Update: RayJames defends SVM, link here.

Update 2: We understand that SVM will issue "a full rebuttal" (source quote) later this morning. This heard from two places now.

Update 3: Two developments: Firstly, SVM came out with its rebuttal this morning and you've probably already rad that, but it's here. Secondly, this is the website of the original anonymous short sellers. Here's how they start their presentation:

September 14, 2011

Our Questions About Silvercorp. (NYSE: SVM, TSX: SVM CN)

Situation Background
On August 29, 2011, we anonymously sent a letter to a number of parties including Ernst & Young (Silvercorp’s auditor) and the Ontario Securities Commission. We indicated that we planned to post some of our research on Silvercorp on the Internet and we included a preliminary copy of our research with that letter. On September 2, 2011, before we had posted any research, Silvercorp announced publicly that it had received a copy of our letter from Ernst & Young. Silvercorp published a press release in which it stated its response to certain of the matters raised in our letter and made reference to certain documents. In the release Silvercorp stated that a special committee of its board of directors has been established. We reviewed Silvercorp’s response, updated our analysis further, and are now posting our revised analysis on the Internet. On September 9, 2011, the media reported that the British Columbia Securities Commission had been made aware of our research and was “examining both the nature of the complaint and the allegations contained in [our] letter.” We have sent a copy of this Internet posting to the British Columbia Securities Commission, the Ontario Securities Commission, Ernst & Young and Silvercorp’s independent directors.

Update 4: Here's the BMO take on today's developments, as per Andrew Kaip (who called the first downmove a buy last week and did well by it).

Disclosure: As subscribers already know I'm long a very small amount of SVM and will hold them for the time being.