Yangtze River Port & Logistics Ltd YRIV Stock News

Yangtze River Port and Logistics Ltd (NASDAQ: YRIV) is seeing strong gains in the market this morning, trading up more than 15% early on. While the company has not issued any news as of late, there’s a good reason for the run. It surrounds a short report that led to recent and dramatic declines in the stock.

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Here’s Why YRIV Is Climbing

It all started on December 6, 2018, when Hindenberg Research issued a report on Yangtze River Port and Logistics. The report suggested that the stock would fall to nothing and that the company would be going out of business. You can read the full report here.

In the report, Hindenberg Research said that it had a strong opinion that the Chairman and controlling shareholder of the company have been siphoning money fromt he United States public markets. Hindenberg went on to claim that the only opertating entity of YRIV was declared insolvent in China and was involved in several undisclosed lawsuits.

While the company issued a rebuttal to the original report, the damage was already done. The stock saw dramatic declines and the uphill battle to bring it back to life commenced.

On January 25, 2019, YRIV decided to fight back, filing a lawsuit against Hindenburg, Nathan Anderson, ClaritySpring Securities, LLC. and Clarity Spring Inc. The lawsuit alleges that these parties orchestrated a market manipulation scheme to disseminate false, misleading and defamatory content to the marketplace for the purpose of inflicting substantial reputational harm on the company for the Defendants’ own financial gain.

This was an important move as it validated the fact that those called out for “siphoning money” from US markets are not doing what they were accused of. After all, who would open themselves to investigation willingly if they were doing something wrong?

All in all, this goes on to show that the YRIV is confident in the value of its assets and the fact that its leadership is doing nothing wrong.

While lawsuits can take quite a while to come to a close, what we’ve seen from the suit so far suggests that Yangtze River Port and Logistics is going to take an easy win here. Digging through the details show that no member of management has profited from any of the deals mentioned in the short report. Moreover, asset values seem to be on point, making this an easy win for YRIV.

An Important Move, Not Just For YRIV But For Future Victims

The truth of the matter is that many short reporters like Hindenberg Research make claims like these all the time. However, they tend not to worry about the backlash that could come of it.

In reality, these reports generally lead to short term runs for the bottom and a recovery in the value of the stock. In these cases, c-suit executives aren’t worried about taking their time to go after the short reporter.

However, this is a different story. YRIV is still trading on an incredible discount as a result of the report. As a result, management at Yangtze decided that it wasn’t going to take the abuse and filed suit. Maybe this will lead short reporters to do more research before making false statements and subjecting themselves to this type of financial risk.

The Opportunity!

The opportunity here is a tremendous one. YRIV is a heavily shorted stock, being held down by those who are still holding onto the research report that caused the issues in the first place. However, once the lawsuit comes to a close, chances are that the defendants will be found accountable and the stock will rip toward the top, generating strong profits for all involved and pushing the shorts out of their positions.

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