“Shares of AAC Technologies Holdings Inc. sank the most in seven years after short seller Gotham City Research questioned the Apple Inc. supplier’s accounting,” Lisa Pham and Joshua Fineman report for Bloomberg.
“The stock dropped 10 percent in Hong Kong, wiping out HK$14.2 billion ($1.8 billion) of market value,” Pham and Joshua report. “Gotham, founded by New York-based Daniel Yu, questioned AAC’s profit margins and alleged that the company engaged in undisclosed transactions with related parties that aren’t listed in Apple’s supplier list.”
“Before today, AAC was this year’s best-performing stock on Hong Kong’s Hang Seng Index with a 58 percent gain,” Pham and Joshua report. “‘We’re intrigued by it because its margins are higher, smoother than some of the best companies in the world,’ Yu said in a phone interview. “’In my experience, that usually means that the company is a truly world-changing, excellent, high-competitive company — or something else. And based on our investigation, we think the facts support the latter possibility.”‘”
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MacDailyNews Take: Uncertainty is bad for share prices.