Muddy Waters Target Spreadtrum Says No Concern on Inventory
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Spreadtrum Communications Inc., the Chinese chip designer whose accounting was questioned by Muddy Waters LLC, responded to the short seller’s report today by saying inventory surged last year because of new products.
Muddy Waters, the investment firm run by Carson Block whose research has preceded almost $5 billion in share losses among Chinese companies trading in North America, cited a fivefold increase in inventory in a letter to Spreadtrum’s management. Block’s firm said the company’s deferred costs may have climbed too fast in explaining why it was betting the stock will fall.