Carson Block, the prominent short seller and founder of Muddy Waters Capital LLC, targeted a Japanese firm for the first time with a negative report on motor-maker Nidec Corp.
Muddy Waters is short the Kyoto-based company and sees its stock falling as much as 52 percent from Monday's close, it wrote in a 53-page short-biased report. Nidec consistently misses sales and profit targets and uses "highly aggressive accounting" to boost reported profitability, Muddy Waters wrote. A spokesman for Nidec said he had no immediate comment. Its shares dropped as much as 5.9 percent in morning trading Tuesday before paring declines.
"In our view this company is not well-governed," Block said in a phone interview from San Francisco. "It uses acquisitions to try to cover up a lack of organic growth in its business."