Rebuttal: Needman Says Muddy Waters Offers “Nothing New” on SPRD

via briefing:
Needham notes Muddy Waters released a negative letter to Spreadtrum CEO Dr. Leo Li this morning raising a number of negative questions about the company’s business, accounting policies and management changes. While at first blush the report raises a lot of questions, they note that nothing new is actually raised in the letter. The firm believes Muddy Waters is taking advantage of its success in identifying other fraudulent companies in China to raise questions about Spreadtrum in order to profit from its short position in SPRD. They encourage investors to buy SPRD on related weakness. Firm says many of the questions posed in the letter to Dr. Li are related to changes made at SPRD as far back as two years ago, the question about SPRD’s success relative to competitors is answered by its market share gains, issues around the increase in Inventories and Advances from customers have been asked and explained over the past two quarters and MobilePeak is admittedly a pre-revenue company that expands SPRD’s technology portfolio to include 3G WCDMA/HSPA air interfaces.