Carson Block: American Tower Got in Under the Wire

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July 17 (Bloomberg) -- Muddy Waters Founder and Director of Research Carson Block discusses overseas American Tower investments with Erik Schatzker on Bloomberg Television's "Market Makers." (Source: Bloomberg)

It is possible, certainly.

Let's talk about the other concerns.

We're talking about incentives around executive compensation, and how in your view it this incentivizes management to run the company in a conservative fashion.

Talk about that in more detail.

Management is based on part compensation growth.

So what this company has done it is it has added tens of thousands of thai workers.

Simultaneously in nine different emerging and frontier markets.

Before the company began this, $1.5 billion in revenue.

Not tiny, but not big.

Take a we pulled up some of the countries from where the accusations -- where the transactions came from.

You have questions with lot of them.

Takeover sure.

In many of these cases we have built our own models.

Getting color for the contracts that and he has.

And we have run models on four of these markets, including germany.

They are not even outperforming the government long bond.

They may seem high, but you look at the government bond and india is 11% yield.

The only one with these outstanding bonds is germany.

This is part of your thesis as it relates back to revert to markets.

You take aim to point out the company is not hedged in international currency exposure.

How you know that?

The company readily admits that.

It says it is to expensive to hedge.

These currencies are extremely volatile, which is why you need to hedge.

The one thing that is important for investors to understand is the company, and therefore, the shareholders are not hedge, but management is.

Comp targets are adjusted to x out in the currency fluctuations on their ebitda hurdles.

In other words, management gets a break that shareholders are not kidding.

Correct.

What about the problems with the structure as a wreath reet?

Two of the companies are not structured as reets.

Right.

They have said they're looking to convert.

These at cell phones towers, these companies, they have a reasonable doubt.

To be honest, i think it got in just under the wire.

This is before you had tim cook in front of congress explaining why apple was using tax manipulation strategies.

If they were to apply to become one today, what the irs agree these are real estate assets?

I do not know.

I am a little bit skeptical.

Aside from that issue, the incompatibility and the business, 4-1 operations, the idea it is you are supposed to cause the company the dividend cash flow?

With international business, it is very expensive in many cases to bring the cash home.

As tim cook would explain.

Exactly.

Investors would be better served if they brought cash home at some point but they do not want to do that.

We had seen action and options market, especially the day we put volume leading up to the report.

Did you leak any of this?

Did people find out about this?

I cannot speculate as to what people knew, but we did not found a dead -- a symbol to life put before this was published.

We were positioned, but you are referring -- referring to the july put volume.

That raises a question, and people were speculating on twitter, hours before we heard from you and hours before you sat down and joined us here that muddy waters research would be issuing some kind of a cell reports in taking a short position.

People want to know how that could have happened.

You are right, there was that speculation.

I have theories as to what happened.

Stepping back, we are in somewhat of a unique situation where the market really looks to us for these impact will calls.

We had back when the packers were trying to get into my account.

I do not know.

I have theories.

I assure you it was not in our interest for all of these people to know.

This text has been automatically generated. It may not be 100% accurate.

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