Global Markets
Home›Global Markets›China›Andrew Left warns short sellers after Evergrande found…
Andrew Left warns short sellers after Evergrande founder sentencing
Left said his early warnings did not prevent Evergrande shares from rising about 500%, and he criticized the idea that being right and being early are the same trade.
Andrew Left, the US short seller known for early warnings about China Evergrande Group, said he is not gloating after Evergrande founder Hui Ka Yan and dozens of associates were sentenced in a Chinese court Thursday, arguing the case highlights risks inherent in short selling. In remarks cited by Bloomberg, Left said Evergrande shares rose roughly 500% after he called the company “a house of cards,” adding that a stock can remain “irrational” longer than an investor’s conviction lasts.
Left was previously fined HK$1.6 million and given a five-year trading ban in Hong Kong in 2016 after authorities accused him of market misconduct tied to “reckless” allegations in a 2012 research report. The latest developments arrive as Left also faces US legal proceedings, after he was found guilty of securities fraud in June for using explosive social media posts to influence shares of dozens of companies for quick profits.
The court outcome capped a dramatic corporate collapse that began after Evergrande defaulted on a large debt load. China’s securities regulator later said the company had vastly inflated its 2019 and 2020 revenue and profits, and state media reported that the sentence reflected exceptionally large amounts involved and heavy economic losses, among other factors.
Hui was sentenced to life in Shenzhen, alongside 56 associates, including his sons Xu Zhijian and Xu Tenghe, according to the report. Before Evergrande was delisted last year, its Hong Kong-listed shares fell by more than 99% from a 2017 peak, a selloff that wiped out about $50 billion in stock market value. Left also said he “never wanted a day of prison” for Hui or anyone else, and that watching the sentence was not satisfying.