Charles Zhang
Long/short equity, value, special situations, contrarian

Is WSP A Fraud?

After spending 10 years researching and investing in Chinese companies, fraud detection has naturally become a fundamental skill. I researched many privatization deals and earlier this year I came across a buyout deal involving WSP Holdings (NYSE:WH). On the surface it was a solid management-led buyout with reputable advisors and law firms drafting the documents, but a little more research showed that there were many red flags. I decided the company and the buyout deal were too risky to invest in. And the profit spread to the buyout price was 2.9% at that time which was clearly underestimating the risks. On the other hand, shorting the stock was a bit expensive and without a catalyst, the payoff can...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details