Spreadtrum Communications Survives Short Attack: Turning Point for the Sector
Spreadtrum Communications (SPRD) became the next in a long line of Chinese stocks to be accused of improper accounting. The stock initially plunged $4, or 34%, but then the market got a surprise as the stock rallied back to breakeven.
A couple of weeks back, our article on Chinese frauds suggested that when the clouds finally lifted on all these fraud allegations, the surviving companies would soar. SPRD might be the signal that the constant allegations are finally being overdone. Clearly the market doesn't believe this one as it lacks the merit of the previous cases against Longtop Financial (LFT) or Sino-Forest (SNOFF.PK).