Muddy Waters Shorts Burford Capital
Short seller Muddy Waters has announced a short position in Burford Capital, a London-listed provider of litigation funding. Muddy Waters says that Burford Capital "has been egregiously misrepresenting its ROIC and IRRs, as well as the state of its overall business" and that "We have identified seven methods by which BUR manipulates Concluded Investment ROIC and IRR."
Muddy Waters says that just four cases have contributed two-thirds of Burford Capital's net realized gains since 2012. Burford opened today at 1,130 pence in London and was down approximately 33% at the time of publishing.
A statement issued by Burford Capital in response to Muddy Waters' note says that its "cash position and access to liquidity is strong" and that it "uses the same IFRS accounting that is used widely across the financial services industry."