, Columnist
Cash Flow Analysis Is a Losing Game in China
Americans should count themselves lucky. Transparency makes investing in distressed companies much less hazardous than in the People’s Republic.
Where did that company put its cash?
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Investing in distressed companies is never easy but can reap huge rewards. Last month, amid the retail trading frenzy sparked by GameStop Corp., Jason Mudrick’s $3.1 billion hedge fund made almost $200 million, the bulk of which came from debt and equity options of AMC Entertainment Holdings Inc.
However, cash flow analysis and other research won’t get you anywhere with distressed companies in China, which can trip up even the most diligent treasure hunter. There, you’ve got to have an in; access to company information is everything.