Tuesday, January 31, 2023

Muddy Waters launches new short campaign in London



Carson Block, the activist behind Muddy Waters Research, pitched a short position in dLocal, a Nasdaq-listed tech company, at the Sohn Conference in London on Wednesday.

In a rare appearance onstage in Europe, the New York-based investor said the Uruguayan financial tech company was a fraud.

Block bucked expectations that he would launch a new Europe-focused campaign.

Related: How Carson Block inspired Dan McCrum in Wirecard pursuit

Muddy Waters has previously shorted Burford Capital, a listed litigation finance company, and NMC Health in London.

He said that dLocal’s managers and directors had sold a lot of stock in the company’s June 2021 and subsequent secondary sale. He then cited “extensive governance deficiencies.”

The investor, who has inspired a generation of short-sellers since betting against Sino-Forest, later exposed as a fraud, made one of two short calls at the event.

The other was by Chris Dale, the former Millennium manager and founder of Kintbury Capital, a low-net long/short equity manager, who is betting against Ocado.

He said he saw a 50% downside in the share price. “Pipeline and Covid drove the valuation upward,” he said, but rivals like Aldi and Lidl had made much more progress since.

The first Sohn event in London since 2019 was dominated by long positions.

Here are all the calls from the event this week