Muddy Waters' short attack deflates Silvercorp stock

Silvercorp Metals (SVM.TSX) saw its share price fall 20% on the Toronto Stock Exchange on Tuesday after research firm Muddy Waters announced that it is shorting the Chinese silver miner, Bloomberg reported. In a Twitter posting on Tuesday, Muddy Waters said that it was targeting the mining company and linked to a report at short-seller site Alfredlittle.com that questioned the existence of several of Silvercorp’s key clients and the legitimacy of its mining operations. “We read the Alfred Little report upon its release, and it supports some concerns we developed when researching Silvercorp,” said Muddy Waters’ head, Carson Block. Muddy Waters made its name in June, when it alleged that Sino-Forest (TRE.TSX) had grossly overstated its financial position. That report led to a 67% decline in Sino-Forest’s stock price, a halt on trading, and eventually a securities fraud investigation into the Canadian-listed Chinese firm.