Spreadtrum Flying Despite Muddy Waters Concern

Yesterday, short selling firm Muddy Waters Research told investors that they were shorting Spreadtrum Communications SPRD and had identified a number of issues in the company's corporate filings. Furthermore, Muddy Waters revealed that they had sent a letter with questions to the company's chairman. This caused investors to panic out of the stock, as the firm has had an excellent track record of uncovering fraud in the Chinese reverse merger space. At one point on Tuesday, SPRD shares were down as much as 30%. A number of Wall Street banks, however, came out supporting the company and the shares were quickly bid back up and finished the session down only 5%. On Wednesday, investors are continuing to defend the stock with their money, as SPRD has jumped more than 11% to $13.90.