Muddy Waters’ Block Says He’s Betting Against Olam International
Carson Block, the founder of Muddy Waters LLC, said he’s betting against shares of Olam International Ltd. (OLAM) because he questions the accounting methods used by the Singaporean trader of agricultural products.
Speaking today at the Ira Sohn Investment Conference in London, Block said Olam is booking profits on transactions before it’s clear how deals will work out over time. Olam is “heavily” indebted and aggressive in how it reports so-called biological gains on its investments, he said.
“It’s a leap of faith to think the company is being honest with its valuation” gains, Block told the conference. “We think the company will fail.” Recoveries for Olam investors will be “negligible,” he added.
Aditya Renjen, a spokesman for Olam, couldn’t immediately be reached outside of normal business hours for comment. A call to Olam’s London office went to voicemail and wasn’t immediately returned.
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