Evergrande has been insolvent for years: Citron's Left

Citron Research Founder Andrew Left joins the Halftime Report to discuss Evergrande's crisis in China. He discusses the potential implications for the company's employees in China and what he learned trying to short the company in 2012. Subscribe to CNBC Pro to access full episodes of Halftime Report: cnb.cx/3nRmC8v
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[@Doggieman1111]

"They were able to keep it going a lot longer than a lot of people thought they would have.." is the story of the entire Chinese economy.

[@nebojsa1976]

Especially USA.

[@tnh723]

aye, they couldn't fake it forever

[@tnh723]

@@nebojsa1976 lol I visit the USA every year. people around the world visit and immigrate there. nobody immigrates to china. oh. just last month? 4th stimulus check for all $1200 and nearly every establishment is hiring people. sure that idiot trump is liable for all the covid deaths due to his negligence, but no economy is riding this out like they are. oh, who's fault is this pandemic again? the world blames china

[@nebojsa1976]

@@tnh723 are you on drugs??? Are you normal??? Where do you think that money is coming from, you fool? Do you even have any idea how much is spent? Do you know who will return that money and how? You have no brain.

[@tonyatgoogle6076]

@@tnh723 did the USA organise repatriation flights out of China during the wuhan lock down. If only China was in charge of US borders perhaps the half a million would not have died.

[@Hecameup]

This needs to happen to the Canadian market. No way a 2 bedroom house is worth a million

[@og4699]

Look into it, legitimately just as much corruption in Canada as China.

[@VenturiLife]

Land value, the house is not worth much usually.

[@miriamllamas224]

Is that in the capital? In Central London, a 2 bedroom flat (not house) is £1.5M.

[@Hecameup]

@@miriamllamas224 Toronto

[@j.calvert3361]

Maybe they are very large bedrooms?

[@elbarca223]

Wow! This guy has the ball to get into a lawsuit in China and stick to his research findings, even it costs him money and time.

[@ligjamesshelton7555]

Bot much?

[@marcostation1000]

man china the máster of stealing, eating pangolins and poluting everything

[@markhudson517]

He has tiny balls.

[@guppy0112]

A good Investment Analyst! It's not the first time it's happened- and probably won't be the last!

[@animewatch4213]

In Hong Kong, which has their own court system than Mainland China.

[@royslapped4463]

I did a report on this year's ago in college. Can't believe it took this long!

[@LordCoeCoe]

Really? For what economics or something?

[@crews9789]

That’s crazy so did I, I created a model that predicted without government support the company wouldn’t survive past 2018

[@dodod15419]

@@crews9789 how has it survived 3 years without government support? loose debt policies?

[@mqbq3651]

@@dodod15419 keeping share price up and raise external funding. Internally create, like the guy said, a lot of balance sheet projects that look good on paper so that investors keep paying for the "growth". If liquidity is not matching anymore, you create a bubble that keeps growing and growing. As soon as you stop creating balance sheet value, investors will sell and your share price crashes. So you are trapped and keep it going until eventually it crashes anyway. That's why it's hard to predict when exactly it comes down, you just know for sure that there is no way out for the company anymore. Unless through a major bail out. But by that time it is not only your current debt that you can't finance anymore, but also any debts coming afterwards, since investors are pulling their money out. Someone can correct me if Evergrande did it differently. I am not familiar with their "financial reports".

[@mdleweight]

I said something similar about the whole Chinese economy and got trolled big time by a CCP supporter.

[@charttrader3605]

I just gained a lot of respect for Left today. Went to court against China... Just proves he backs his research, right or wrong.

[@rubberlung1]

"I am banned for 5 years from trading in Hong Kong because of that report" Lol what a joke

[@saltymonke3682]

and he had to give 1.6 million HKD to them

[@jasoncrelopia821]

Lesson learned: never ever invest anything China

[@KDONeal1]

Dummy China own the world lol

[@winnerwinnerchickendinner8809]

most stupid comment ever. just like Merica pure capitalist at the highest with fiat printing press

[@kevngu7256]

I made money investing in china. just like US have ENRON , tharenos, Nikola and many more.

[@ragingmonk6080]

People learning today what I have always said. I never invest in China.

[@stevelaw5201]

... you probably don't have more than 1M to invest anyway.. so yeah.. China is where the big boys battle royale

[@jayeshratangairi8732]

That smile at the beginning is like ' I told you so '

[@raylopez99]

Wow, what a story! This guy is a hero, unfortunately, he took a spear in the guts from the Chinese state.

[@SovereignMoney]

also from wsb

[@jeffw8218]

“The market can stay irrational, longer than you can stay solvent”. Andrew Left was right, but he was way too early.

[@johnpalma7265]

@:Jeff W With all due respect sir "IRRATIOMAL"

[@jeffw8218]

@@johnpalma7265 Fixed 😄

[@OneNewHope]

lol ahhh Citron... the ones that announced they shorted GME and started crying about the mean ol' redditors that cost them money.

[@stevenk4920]

Also the ones that called Shopify a fraud when shares were about $100. Look at them now. Wonder how much money people missed out on listening to these clowns

[@godogs89]

Melvin capital was the one that got wrecked by GME short squeeze not citron. Citron bailed Melvin out for a large percent of their ownership.

[@yuchaofan]

@@godogs89 you have got it completely mixed up lol. Citron is just one short seller dude who indeed shorted GME at one point. As a well-known short seller he became particularly unpopular following his comments on GME. Melvin is a hedge fund with billions aum. CITADEL bailed out Melvin.

[@ishtar0077]

Lol I just wrote something similar with the ending gme goes brrr lol

[@MrCudiBuddy]

@@godogs89 yeah you messed this one up guy.

[@RahulEditzzzz]

everytime they say theres nothing to worry about, thats when you worry

[@kimberiysmarketstrategy]

The market can remain “whatever” longer then you can remain solvent.

[@TheRetiredVeteran]

Is it "irrational?"

[@MrZozue]

Good one. Zombie since 2008. Also the MSM huge coverage is a major red flag. FUD propaganda.

[@cedric2765]

So the guy will buy securities at the end, Evergrand’s fate is priced in !

[@evaristegalois4290]

I think he was referring to securities trading in HK, not specifically evergrande ... of course I could be wrong

[@mikec1651]

Hello I like this guy Left, gets into scrap with HKSE loses, is proven correct, doesn't gloat and still comes up with good solid realistic opinions of what will happen next and to whom. Admirable. m

[@pjdurkin8582]

You're right

[@brian91145]

i say let it all burn. There is no price discovery anymore anyway

[@samsonsoturian6013]

There never was any in China

[@jorgeponce5512]

This was amazing.

[@dfu2009]

Thank you for bringing Mr. Left on air today, CNBC. It is certainly a vindication for him, if only in the court of public opinion. It also shows that Hong Kong has long been co-opted by the mainland Chinese operations and backroom dealing, long before the 2014 and 2019 social movements.

[@kikolatulipe]

SEC should BLOCK any IPO without audited statements!

[@kalef1234]

hello shitron lol long time no see. still enjoying my GME gains

[@adambnz]

Contagion has started.

[@Mrbfgray]

Sounds like wishful thinking from one on the sidelines.

[@jamesconrad3367]

@@Mrbfgray 😆

[@CeeZee001]

Remember this fella from January with GME

[@samuraibat]

This was amazing🚀

[@philkeh]

I sold all of my China stocks because of the Evergrande bankruptcy. That's too hot for me at first ... 75% of the capital of a Chinese household is in real estate. The government must now try to keep house prices artificially high. How this works is unclear. It can all get pretty panicked because a lot of the Chinese growth of the last few years is going down the drain. 28% of GDP depends on a growing real estate sector that is now no longer allowed to grow. That will be exciting, but for Chinese stocks one can expect turbulent months in which a lot of negative things can still happen. This is not a small story that can be regulated away from time to time. This is a solid bubble in the country's most important industry that has to be popped in a controlled manner and that will also have negative effects on the Chinese stock exchanges because an extremely large amount of capital will be destroyed that is not available for consumption. There is probably less bearish potential for the global economy. But for Chinese stocks, this can lead to some panic selling on the part of Chinese investors. Depending on how the government reacts in the next few months. So I'm only referring to Chinese titles with caution for now. Chinese stocks that are primarily listed in China or Hong Kong, such as BYD, are already subject to high volatility anyway because many people in China play the stock exchange more like a casino. This investor behavior paired with the current uncertainty on the Chinese real estate market can easily lead to panic overreactions where discounts of up to 50% can occur. I prefer to have my money outside at the moment to step back in at low prices when it comes to that.

[@blakemann2365]

Equity and bond holders will be wiped out. Wow!

[@samsonsoturian6013]

The real bad news is Evergande's case is fairly typical. There's real estate bankruptcies every day of the week in China.

[@mttlim18]

They might recover if Citron publicly shorts it

[@janetpelletier1238]

hahaha, true enough. I am guessing a lot of the commenters are learning of Left (Citron) for the first time...so much praise??

[@samsonsoturian6013]

You know there's a systemic problem when a short seller gets banned for posting quality Due Dilligence.........

[@Sacto1654]

This is going to make the Enron and Worldcom messes look like a minor event in comparison.... 💸😒😑🙄

[@VenturiLife]

Theranos was valued at $10B. Enron held $63B in assets at the end. Theranos had few assets also.

[@cashcash5711]

6 years???? Tell me again about efficient markets 😂 … Can you imagine how far a bubble can last … Holly 💩 Great work citron research 💪

[@donarrivas1675]

Beijing has several options to handle its economy with minimal impact of Evergrande debacle. One sure thing is that Evergrande won't crash hard as CH central bank quietly puts down a standing-by cushion of $40 Billion usd for Evergrande debts alleviation. But, Beijing waits to let the private sector play out the future of Evergrande.

[@Madame702]

There is no private sector bail out. And China doesn't allow foreign investor into their housing market so Evergrande is screwed.

[@simonchang3929]

That's right. Evergrande has been insolvent for many years. All developers are insolvent. All large firms ars insolvent. The few solvent and profitable firms are being confiscated.

[@kinboon3138]

Hope the CCP will punish the boss or the director and doesn't follow the USA handling the Lehman Brother. Where the boss paid a fat bonus to themselves

[@Alex-lp6bg]

Where do I have Citron from? There was some negative news a while ago. Or am I confusing them with someone else?

[@lisa2948]

Part of the gamestop drama circa January

[@Alex-lp6bg]

@@lisa2948 ah, thanks!

[@ligjamesshelton7555]

Here we go again ! Woo-hoo!

[@Mrbfgray]

Not according to Left. Been on the sidelines too long and missed out on massive gains much? :D

[@glennalexon1530]

Probably didn't help that his 'report' looks like a little kid's first powerpoint. Couldn't get your logo to match your background, Left?

[@hintzod]

This is the guy who invested in Lucky Coffee

[@haruruben]

Even a broken clock is right twice a day. All CCP businesses are fake and frauds

[@hussain200625]

No way this doesn’t have contagion at least it will domino effect into aus nz canada real estate markets...

[@deejay7339]

Why would it? From what I understand most of the money is chinese money.

[@kineahora8736]

Yeah ”no contagion” is what they said about US subprime mortgages and associated securities in 2007. But their government has ultimate power so they may be able to handle it better.

[@VenturiLife]

@@kineahora8736 Australia was actually not hit by U.S. sub-prime much because we had little exposure. Things were booming, but it eventually caught up with some of the US companies operating here.

[@The12thSeahorse]

Can someone correct me…..if Evergrande owed 12 billion in 2012 and now they owe 300 billion, isn’t that an increase of 2,500% in debt? Isn’t that insane?

[@nathan4223]

Is this the same guy who said GameStop was going back to 20$ and fast? back in january

[@kazee502]

yes

[@BobJoy_my_collection_of_stuff]

look at yellow freight USA , we do the same stuff but small.

[@rrvillareal2011]

It'll be a sight to behold!

[@charlstin1979]

Lmfao! Banned in HK hahahahahaha!!! Well done! The truth hurts the CCP yay! 🤣🤣🤣

[@mogtrader8]

Can he re-sue?

[@udarpavarota396]

Isn’t this the guy who shorted GameStop and lived to regret it?

[@armchairwomanmao2922]

There's ONLY so long you can kick the can down the road

[@jokerr3824]

Sounds like US government debt !

[@svetakokareva9455]

Respect to Citron

[@saltymonke3682]

Trying to win against Chaina in Chaina is like asking a fish to climb a tree. 😂

[@deficator750]

every since lockdown intrinsic valuations went put the window on every single asset. Let all the markets crash and burn

[@oluadroit8692]

So this is the famous Andy Left

[@brammiejo]

A broken clock is right twice a day. He is a notorious Tesla shortseller

[@glennalexon1530]

So Citron was about nine years early on it's short.

[@purplerings1969]

Left do you have a position in GME?

[@monotoshdutta4824]

What about investing in Indian market, experts comments expected...

[@yaboi_69]

Citron Research isent that the guys that said GME would be at 20 dollars?

[@jjbully]

This sort of lawsuit things isnt uncommon all over the world, big companies use the legal system to bully individuals

[@j.calvert3361]

Do you know who sold all the land Evergrande built their houses on?.... Well, there you are.

[@pmorton7960]

The people that put money down on those properties are in a mess...

[@j.calvert3361]

Average Chinese... poor guys.

[@JP-gw9ts]

$300,000,000,000 in debt seeing the number is all it’s digits puts everything in perspective.

[@williamd7161]

If someone raise an alarm against a company, you should be ready to short it when its time bomb suddenly explodes!

[@robertbusso6859]

Is this just part of the larger scheme of things?

[@stevelee7781]

China is going down for the count...How this affects the US is the real question.

[@suwirwong]

What stoping him counter sueing back ,since it was a fact now.

[@jdrancho1864]

It's like Elon Musk suing the SEC to try to claw back the fine for his predictive statements about Tesla stock.

[@alicecoppers8980]

HSBC owns all the loans from Evergrande. Thus, all banks will be affected.

[@ask_why000]

But-but-but, CNBC just reported that Evergrande’s problems were solved… so…?

[@BB-cr9ry]

Sell all or lose all!!

[@hoodxgod]

rich people help rich people even if they r enemies. scratch my back and i scratch yours but we still be rich in the end together

[@raylopez99]

@carl hartford True, reminds me of Enron and that crooked agricultural products firm in Italy, Permolat or some such. Crooks.

[@SegaDream131]

You would think they could afford a stick or something.....

[@robsmith5526]

What did I just watch?

[@Honeybadddger]

They all cook book. If they tell you they don’t, it’s a lie, everyone knows. Why don’t you think the stock is offered to sell on the market because it’s not worth a penny.

[@kenzong8427]

wall street investment banks , quadrillions OTC derivatives bets, EG is peanut......

[@qazwsxedc964]

A broken clock since 2012 HAHAHAHAH

[@samsonsoturian6013]

He was right the whole time, and Beijing actively punished him for burst their bubble (literally).

[@warntheidiotmasses7114]

Wallstreet Bets should announce a short squeeze. Who's paying these prices for Crocs and Generac? RETL et al.? None of these stock prices are justified. Eventually all of them will look like CBS Viacom.

[@jennerb7059]

Imagine reditors start buy Evergrand 😳

[@og4699]

Bad idea, company gunna fold

[@apollo_1238]

A scam is scam, no matter what culture you in.

[@tomsmith8906]

He was wrong then though. If he said it would go insolvent, and soon, in 2012

[@tyhaas3w]

its happening...

[@spotato]

Ask him what about Game Stop？？？

[@ko5000]

I think he will short it, he just can't say on Publicized media....

[@dk808c4]

Finally some truth. Also read McMarket by John king for similar. !$

[@mayankjain3299]

It's the same in India with builders & developers like Jaypee, Lodha group...remember these names.

[@michaelmallal9101]

Trading while insolvent is illegal in Australia. I'm investing family fortune In Evergrande.

[@joseadolfovela485]

He wanted to get the truth out 🤣🤣🤣. When short seller lie so much just to get price down. Good for him to get banned.

[@habibbialikafe339]

yall redditors had the balls to try and bankrupt this man just because he works at a hedge fund that shorts stocks. but when its a chinese company, yall all praise him. hypocritical asf

[@PretentiousStuff]

Is anyone here after that other CNBC video where they had a guy with a fake nose and mustache on the show lol?

[@porkbork3500]

His head even looks like a lemon

[@Dinngg0]

We have a lot of insolvent zombies in the US markets, and it will be great to see the dominoes start to fall.

[@razorblade7408]

But the u.s doesn't work on capitalism free market ideas. Big company's get bailed out Little people like me when my business struggles I either sink or swim

[@VenturiLife]

@@razorblade7408 Socialism for the Rich, Capitalism for the Rest.

[@andrewwotherspoona5722]

I can't see how the collapse of a 300 billion company has any impact on a country of 17 trillion. It just seems over exaggerated.

[@thedude1666]

IT WILL BE FUN WATCHING THE HOUSE OF CARDS, COME TUMBLING DOWN

[@wuhanbiruSux]

GME burnt them good 🤣 he can't sorry short 3333:HK

[@samsonsoturian6013]

He's got a lot more schemes than just that

[@ishtar0077]

Calm down Citron guy lol......gme goes brrrrr

[@tophat2002]

Buy when Others are scared!!!

[@pinchmesh2856]

When it comes to the choices of tomorrow and money, money wins. Especially in china.

[@sueyuyu3654]

Shitron Left didn't looks so confidence. GME and AMC Bag holders. lol

[@SegaDream131]

There are people who invested in CHINA😂🤣😂🤣😂🤣😂

[@BabyBoomersDoomer]

Stroke this mans ego

[@chungnicky]

Evergrande is still trading today. What a joke to the world?

[@benben6054]

Everyone knew

[@williamhornabrook8081]

He IS a short seller, so his reporting is kind of 'conflict of interesty.' China using heavy handed legal measures to suppress critical research on Chinese companies sounds pretty par for the course. Just because he made a critical report and now Evergrande is failing, doesn't necessarily vindicate him on the charges of representing information disingenuously.

[@marcusarnlaugson3254]

Ship ever Given from the Evergreen company. Now evergrande. causing trouble Should I care about Everest?

[@redguard2529]

Fewer and fewer Peters. And, an ever increasing number of Pauls.