SINGAPORE - Muddy Waters finally put its mouth where its money was on Tuesday with a 133-page report on Olam detailing what it claims are the commodity trader's shortcomings, and recommending a "strong sell".
The report comes a week after the man behind Muddy Waters - US short-seller Carson Block - told the market that he had shorted Olam stock and called the firm's accounting practices into question.
Thinking that Muddy Waters would be releasing its report on Tuesday morning, Olam was forced to halt trading of the stock. When it resumed trading later in the day, its share price tumbled by as much at 11 per cent.
After an "initial read" of the report, Olam said Tuesday evening that they "remain clear that there is no substance in their broad allegations. We continue to study the report in greater detail and will provide a fuller response in due course."
Olam added: "We will clear our name and hold Muddy Waters accountable for their damaging actions."
Even in the face of a lawsuit that Olam launched against Muddy Waters and Mr Block last week, the US research firm doubled down on Tuesday, calling Olam's response "stunningly defensive" and insisting that, "in no way are we intimidated by Olam",
The upshot of the report valued Olam on a "liquidation basis" and estimated the present value of unsecured bonds at "14 to 33 cents on the dollar".
As the market digested Muddy Waters' report on Tuesday, analysts held out on jumping to conclusions.
"We know the intention and we're hearing one side of the story. We should hear both sides of the story and let Olam respond to the report," said UOB-KayHian analyst Eugene Ng.
Olam's shares on Tuesday plunged in the late afternoon as news of Muddy Waters' report broke, ending 10 cents lower at $1.56. It has tumbled 10.3 per cent since Muddy Waters launched its criticism of the firm.