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> DISCLOSURES ... Scorpion Capital LLC is short Lasertec Corporation I have no information about either company and take no position on whether the allegations

> DISCLOSURES ... Scorpion Capital LLC is short Lasertec Corporation I have no information about either company and take no position on whether the allegations are true. But note that what Scorpion Capital is doing here is a classic play of 1) establishing a short position and then 2) publishing research to convince the market to dump the stock. Of course, this classic play is most effective if they are right. Again, I know nothing. I just find financial markets interesting.

ttul 2y ago
These short analyses are always in the form of ultra-dense slides. It’s something of an art form.
- duskwuff 2y ago
  This one's got an overview of what EUV is starting on page 32. Interesting reading even if you aren't interested in the market play.
keiferski 2y ago
You would probably find Hindenburg Research interesting: Hindenburg Research LLC is a U.S. investment research firm with a focus on activist short-selling… Named after the 1937 Hindenburg disaster, which they characterize as a human-made avoidable disaster, the firm generates public reports via its website that allege corporate fraud and malfeasance. https://en.wikipedia.org/wiki/Hindenburg_Research https://en.wikipedia.org/wiki/Hindenburg_Research
- lencastre 2y ago
  The GOAT
hackton 2y ago
This is called Trash and Cash, this is a market manipulation https://www.marketconductrules.com/risks/trash-and-cash/ https://www.marketconductrules.com/risks/trash-and-cash/
- vasco 2y ago
  Not necessarily. The target company almost always complains about manipulation, because of course they do. But even Herbalife, a clear pyramid scheme, shouted "we're being manipulated!", when people published research saying they were a pyramid scheme. I don't know this Japanese company so I don't know in this case. https://www.google.com/amp/s/www.businessinsider.com/bill-ackman-herbalife-stock-manipulation-investigation-2015-3%3famp https://www.google.com/amp/s/www.businessinsider.com/bill-ac...
  - fshbbdssbbgdd 2y ago
    A good example of how the market can remain irrational longer than you can stay solvent. Just because Herbalife is morally a pyramid scheme doesn’t mean the FTC was going to shut down the company. Herbalife stock went up and Bill Ackman exited his trade at a loss after five years. When Herbalife stock finally crashed last year, Bill Ackman declared victory for his “psychological short”.
- jojobas 2y ago
  Is is still manipulation when what you're publishing is true?
  - hdjdjdj 2y ago
    IANAL but if it is not true, you open yourself up to libel.
Beijinger 2y ago
After a short glimpse, it is hard to tell if the allegations are true. With other short sellers, the story was easier to understand and verify,e.g. Chinese plane ticket sellers where it turned out basically impossible to buy a plane ticket. I also found the allegations against Wirecard in Hackernews plausible, since such a complex network of companies rarely has legit applications. But Lasertec Corporation, I don't know. E.g. :"Sources indicate that customers – presumably Intel - who claim to use Lasertec’s EUV tool are secretly using its old DUV system instead; that TSMC is running parallel, redundant inspections with non-EUV tools and has reverted to the DUV-based inspection process it used prior to Lasertec; that the market window for actinic EUV mask inspection is rapidly closing, as the next phase in EUV is High NA, which requires an electron beam solution, as OPC patterns and sub-resolution assist features (SRAF) are smaller than 13.5nm and cannot be detected with actinic EUV light – leading ASML, KLA, and others to develop multi-beam inspection tools for High NA masks that render the ACTIS tool obsolete." A lot of claims, very little beef. And why should Intel "secretly" use other equipment? Are they a stakeholder in Lasertec? All the allegations are possible, but not convincing, as laid out.
- bpfrh 2y ago
  From point 6a: Struggles at Intel. Lasertec’s EUV mask inspection effort is Intel’s baby, which it sponsored with $300-500MM in advances >5 years ago as its “founding” customer after failing to convince KLA. Intel’s mask group is trying to save face and cover up that its investment has been a debacle, giving it supplier prizes for public PR while “blowing up” on Lasertec behind the scenes, according to multiple research sources Intel currently has issues with marketshare from amd and arm maybe they don't want to post that loss and setback for some targets? Edit: spelling
baq 2y ago
I like this business model, you have to invest a lot of your own money to make a credible report like that, preferably multiple to establish reputation and keep doing that. If the SEC or equivalents don't do that, might as well let private capital hunt down fraud.

ttul 2y ago

These short analyses are always in the form of ultra-dense slides. It’s something of an art form.

duskwuff 2y ago
This one's got an overview of what EUV is starting on page 32. Interesting reading even if you aren't interested in the market play.

keiferski 2y ago

You would probably find Hindenburg Research interesting: Hindenburg Research LLC is a U.S. investment research firm with a focus on activist short-selling… Named after the 1937 Hindenburg disaster, which they characterize as a human-made avoidable disaster, the firm generates public reports via its website that allege corporate fraud and malfeasance. https://en.wikipedia.org/wiki/Hindenburg_Research https://en.wikipedia.org/wiki/Hindenburg_Research

lencastre 2y ago
The GOAT

hackton 2y ago

This is called Trash and Cash, this is a market manipulation https://www.marketconductrules.com/risks/trash-and-cash/ https://www.marketconductrules.com/risks/trash-and-cash/

vasco 2y ago
Not necessarily. The target company almost always complains about manipulation, because of course they do. But even Herbalife, a clear pyramid scheme, shouted "we're being manipulated!", when people published research saying they were a pyramid scheme. I don't know this Japanese company so I don't know in this case. https://www.google.com/amp/s/www.businessinsider.com/bill-ackman-herbalife-stock-manipulation-investigation-2015-3%3famp https://www.google.com/amp/s/www.businessinsider.com/bill-ac...
- fshbbdssbbgdd 2y ago
  A good example of how the market can remain irrational longer than you can stay solvent. Just because Herbalife is morally a pyramid scheme doesn’t mean the FTC was going to shut down the company. Herbalife stock went up and Bill Ackman exited his trade at a loss after five years. When Herbalife stock finally crashed last year, Bill Ackman declared victory for his “psychological short”.
jojobas 2y ago
Is is still manipulation when what you're publishing is true?
- hdjdjdj 2y ago
  IANAL but if it is not true, you open yourself up to libel.

Beijinger 2y ago

After a short glimpse, it is hard to tell if the allegations are true. With other short sellers, the story was easier to understand and verify,e.g. Chinese plane ticket sellers where it turned out basically impossible to buy a plane ticket. I also found the allegations against Wirecard in Hackernews plausible, since such a complex network of companies rarely has legit applications. But Lasertec Corporation, I don't know. E.g. :"Sources indicate that customers – presumably Intel - who claim to use Lasertec’s EUV tool are secretly using its old DUV system instead; that TSMC is running parallel, redundant inspections with non-EUV tools and has reverted to the DUV-based inspection process it used prior to Lasertec; that the market window for actinic EUV mask inspection is rapidly closing, as the next phase in EUV is High NA, which requires an electron beam solution, as OPC patterns and sub-resolution assist features (SRAF) are smaller than 13.5nm and cannot be detected with actinic EUV light – leading ASML, KLA, and others to develop multi-beam inspection tools for High NA masks that render the ACTIS tool obsolete." A lot of claims, very little beef. And why should Intel "secretly" use other equipment? Are they a stakeholder in Lasertec? All the allegations are possible, but not convincing, as laid out.

bpfrh 2y ago
From point 6a: Struggles at Intel. Lasertec’s EUV mask inspection effort is Intel’s baby, which it sponsored with $300-500MM in advances >5 years ago as its “founding” customer after failing to convince KLA. Intel’s mask group is trying to save face and cover up that its investment has been a debacle, giving it supplier prizes for public PR while “blowing up” on Lasertec behind the scenes, according to multiple research sources Intel currently has issues with marketshare from amd and arm maybe they don't want to post that loss and setback for some targets? Edit: spelling

baq 2y ago

I like this business model, you have to invest a lot of your own money to make a credible report like that, preferably multiple to establish reputation and keep doing that. If the SEC or equivalents don't do that, might as well let private capital hunt down fraud.