Blackstone Mortgage Trust and the Muddy Waters Bear Attack
Brief Version
Short attack by a bear (Muddy Waters). I haven’t been impressed with their prior work. The REIT Forum has an excellent record of forecasting mortgage REIT performance. Our trading history speaks for itself. In our opinion, it appears the goal of this report is to drive market prices lower to capitalize on shorts. The Doomsday scenario is more hype than substance.
All Opinions
As a reminder, everything here is opinions. Muddy Waters provided theirs. We’re providing ours.
Longer Version
I’ve got a few notes. After that, you get the real analysis from Scott Kennedy.
Muddy Waters (the bear) published a big report. I’ve critiqued the company before for having a terrible presentation. I’ll give them credit for not being as disorganized this time. That isn’t a high bar to clear.
Carson Block (of Muddy Waters) highlighted that he’s shorting the stock. No big surprise since that’s a major incentive for writing big bearish presentations. The release and the announcement appear to be timed to hit the share price together. If they can cause the share price to go down, then it reflects positively on the research. That works regardless of the quality of the research.
If they can move the market, it has two positive impacts:
Get more fame. The more the market moves abruptly, the more big investors are inclined to feel that their opinion matters.
Make money shorting. Seeing as they are shorting BXMT, they really want to make money from the price falling. Being short the stock without the price falling would be a bad deal.
Our Assessment of BXMT
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The more detailed parts will be reserved for paid members.