Shares of Hong Kong-listed Chinese diary company Huishan Diary Holdings Co. barely moved after Muddy Waters, a research firm known for betting against publicly listed Chinese companies on grounds of fraud, released a negative report on the company in December 2016.
But suddenly, Huishan stock dropped a spectacular 90% today after rumors spread that the company's key shareholders might have stolen as much as RMB3 billion – an amount double to what Muddy Waters has estimated – and that it faked most of its financials.
In local trading today at around 11:30am, Huishan's share price dropped as much as 90% to HK$0.275 per share, from just under HK$3 a piece yesterday, as investors rushed for exits, wiping out US$4.2 billion of market capitalization. A total of 779 million shares changed hands, a record for the Hong Kong Stock Exchang...
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