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Spruce Point Shorts Monolithic Power Systems

New York-based short seller Spruce Point Capital Management has announced a short position in Monolithic Power Systems, a designer and manufacturer of power management solutions.

In its report, Spruce Point claims it has evidence that approximately 40% of Monolithic's sales in China are irreconcilable; Spruce Point says that the tax filings of Monolithic's three Chinese subsidiaries show revenue of $73mn, whereas it says that Monolithic claimed that $335m of its 2018 company-wide revenue came from China.

Spruce Point's note adds that it Monolithic exhibits some Obvious And Some Subtle Near-Term Signs of Financial Strain and that key board members are linked to controversial companies.

Spruce Point sees 75% - 85% downside to MPWR shares.