Just to add to my portfolio woes this week, Burford Capital has tanked. Litigation finance firm Burford Capital drops as Muddy Waters says it's shorting it - MarketWatch
Perhaps a news-driven buying opportunity in a volatile AIM stock?
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Out of interest. What drew you to invest in Burford Capital originally?
âBear raidâ accusation here: Latest market news | AJ Bell Youinvest
I hold BUR, would buiy more if I had the spare cash.
This guy is a very famous short-seller. Just announced a âshort position on an accounting fiasco thatâs potentially insolvent and possibly facing a liquidity crunch.â as well as the company has âegregiously misrepresented its ROIC and IRRs, as well as the state of its overall business.â
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I can see what they mean, but I can also see why they would say itâs a âbear raidâ. Still, all very interesting.
Itâs cool that your original reasons for investing still stand, and you are still holding, but what made you want to invest originally?
Was looking to have different shares in my Freetrade âfunâ portfolio (ie not in my ISA). BUR were certainly different, I liked and understood (or thought I did!) their business model, good business in the pipeline, increasing dividends paid over past few years, decent dividend cover.
Note itâs only a small holding, so the tanking is nothing to shed any tears over!
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Heâs very prominent in the documentary The China Hustle I posted last weekend in the community. Highly recommend
Growth stock with big future and track record, undervalued in several metrics and actually profitable. Of course thatâs nothing if they havenât been playing fairly which will be a hard lesson for me.
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Yeah I am invested also, itâs been a horrible day. Itâs a claim at this point and itâs freaked out everyone. We will await to see what Burfordâs response is.
Yes I know but they didnât go into detail, which I think they will do, Im talking about an actual response,
They say they will look into the claims and respond appropriately.
Phew, good job I scooped up a few yesterday! 
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Still a buying opportunity even though itâs up 30%. IMO.
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Very strange that Muddy Waters reduced their short position days before issuing such a damaging report
Because their analysis was fundamentally flawed. It was underpinned by a criticism of a perfectly legitimate accounting method.
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What about the concerns raised around corporate governance? Burford isnât exactly a role model in this regard
(Disclaimer - I hold a long position)
Agreed, just seems a very strange strategy.
They know they are about to release a report that could cause a share price to crash and then reduce their short position⌠Just doesnât make strategic sense.
Even if they think the business is fundamentally sound, they know their report will cause a short-term sell-off and theyâd profit so that wouldnât stop them issuing a report to cause that when they hold a short position. But knowing that, why reduce your short position?
No not a role model, but in no way does minor corporate governance concerns warrant a 60% fall in the value of the stock.
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