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Burford poked the bear – Muddy Waters lashes back

13/08/2019 · Burford Capital Ltd (BUR) 

AIM News Shares UK

Scales of justice

Burford Capital has hit back at the claims made by Muddy Waters. Muddy Waters has subsequently counter-attacked with another unflattering note. Here's our take on the strength of the defence.


First a reminder of the events to date:

06/08/19 – Muddy Waters revealed it was short Burford and would be releasing a note to confirm its doubts about the company. The firm has since revealed that it took a 0.71% short stake in Burford on 5 August. This point is significant to us. Short positions can only be built if shareholders in the target company are willing to lend out their shares.

07/08/19 – Muddy Waters releases its short dossier claiming that Burford “egregiously” misrepresented its profit figures. The note points to seven individual cases where internal rates of return and return on invested capital had been flattered by the company; questions the group’s use of fair value accounting; and calls the company up on governance issues, including the fact that its chief financial officer is the wife of the chief executive.

Our full run through of the allegations in the note can be found here.

Burford’s share price plummeted 50%…

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