Lihua Falls a Record 22% Following Short Seller’s Allegations

Lihua International Inc., a Chinese producer of copper wire, fell a record 22 percent in the U.S. after a short seller said the company misrepresented itself to investors.

Lihua, based in Danyang, China, dropped after Absaroka Capital Management LLC, a Cheyenne, Wyoming-based hedge fund, said in a report that concerns include “illogical financial results” and deals with Danyang Huaying Resource Recycling Ltd., which is majority owned by Chief Operating Officer Wang Yaying. Lihua’s management has engaged in “excessive stock promotion,” and the shares should be valued at $3, Absaroka’s Kevin Barnes wrote in the note.