(1) Get information
The combination of consulting materials and field research is a necessary lesson to understand the true face of a company. Although it is impossible to know how Muddy Waters chose the target for attack-it may be that the initial information and financial analysis found doubts and traced them, or that insiders provided clues, Muddy Waters must study all kinds of public information of listed companies in detail after choosing the target for attack. These materials include prospectus, annual report, temporary announcement, official website, media reports, etc. And the time span is often very large.
(2) Investigate interested parties
In addition to the listed companies themselves, Muddy Water also attaches great importance to the investigation of related parties. Related parties are generally important promoters of hollowing out listed companies. Related parties include major shareholders, actual controllers and brother companies. And those companies that seem unrelated on the surface, but actually obey the actual controller.
(3) the company field research
On-the-spot investigation of the company is an important link in obtaining evidence. The investigation of muddy water is very detailed and the investigation period is often very long. For example, the survey of Focus Media lasted for half a year. The forms of investigation include but are not limited to telephone interviews, face-to-face communication and field observation. As the saying goes, "hearing is false, seeing is true", and the results of field research often greatly exceed expectations.
(4) Investigate suppliers
In order to understand the real business situation of the company, Muddy Water conducted a survey of suppliers of listed companies to confirm the authenticity of the information of listed companies. At the same time, Muddy Water will also pay attention to the supplier's office environment, supplier's production capacity, sales volume, sales price and other business data, pay close attention to the supplier's evaluation of listed companies, and compare it with the public information of listed companies as a benchmark to judge whether the supplier has the strength to conduct commercial transactions with the company under investigation in line with public information. Muddy water even pretended to be a customer and called the supplier to understand the situation.
(5) Investigate customers
Muddy water pays special attention to the investigation of customers. The survey methods also include consulting materials and field research, including online survey, telephone inquiry and field interview. Muddy water focuses on verifying the actual purchase quantity, purchase price and customer's evaluation of listed companies and their products.