Whitney Tilson Shorts Montage Technology, NQ Mobile

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Whitney Tilson Shorts Montage Technology, NQ Mobile
Whitney Tilson

Well-known investor Whitney Tilson says investors haven’t learned from the Chinese frauds which caused problems in the past. Now he has revealed that he’s shorting a couple more Chinese companies. This time, it’s Montage Technology Group Ltd (NASDAQ:MONT) and YY Inc (ADR) (NASDAQ:YY). Tilson revealed that he was shorting a couple of other Chinese companies—NQ Mobile Inc (ADR) (NYSE:NQ) and Vipshop Holdings Ltd (ADR) (NYSE:VIPS) back in January.

Tilson’s new shorts: Montage Technology, YY Inc

Tilson didn’t say much on exactly why he is shorting Montage Technology Group Ltd (NASDAQ:MONT) and YY Inc (ADR) (NASDAQ:YY), other than to hint that he has basically lumped them in with the likes of NQ Mobile Inc (ADR) (NYSE:NQ).

“It’s amazing how little things change and how little investors learn, as dicey Chinese companies are all the rage once again,” Tilson said in an email sent to ValueWalk.

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Tilson cites recent short reports

The investor pointed to past short theses from other firms regarding Montage Technology Group Ltd (NASDAQ:MONT), YY Inc (ADR) (NASDAQ:YY) and NQ Mobile Inc (ADR) (NYSE:NQ). You may remember that notorious short-selling firm Muddy Waters sent ripples through NQ Mobile shares not too long ago when the firm’s founder Carson Block called the company a Chinese fraud and said he was shorting it.

Another firm, Gravity Research, more recently wrote up a couple of reports about Montage Technology Group Ltd (NASDAQ:MONT), calling the company’s accounting practices into question. The tactic was similar in some ways to what Muddy Waters said about NQ Mobile Inc (ADR) (NYSE:NQ).

Last August, a Seeking Alpha contributor noted some issues about the Chinese Internet company YY Inc (ADR) (NASDAQ:YY), saying some of its financials were questionable and calling it an over-hyped stock.

Tilson accuses accounting firms of being “complicit in the fraud”

Last month, Tilson basically accused the world’s “Big Four accounting firms” of being complicit in the fraud he says companies like Montage Technology Group Ltd (NASDAQ:MONT), YY Inc (ADR) (NASDAQ:YY) and NQ Mobile Inc (ADR) (NYSE:NQ) perpetrate. He says they are “blessing the cooked books,” and that it’s “jaw-dropping what these accounting firms are doing.”

 

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