Hedge-fun titan John Paulson got burned by a China company

Have you heard of Muddy Water Research? A so called equity research firm specialized in shorting Chinese companies listed overseas via reverse takeover. Muddy Water has attacked 4 companies since last summer and the first three ones were small- and micro-cap Chinese companies traded in the U.S. The company now goes after the big fish and its last prey was a Chinese company called Sino-Forest traded in the Canadian Stock Exchange.

Sino-Forest had over $6B market cap before the attack and John Paulson, the renowned hedge-fund manager, owns about 14% of the company. Since the short attack on June 2nd, the company's stock has plunged from 20 to 5, or over 75%. At one point of time, Paulson had more than $300MM paper loss.

Read more about the story.
Big Funds See Red in China    by WSJ 6/9/11
Sino-Forest clobbered by short-seller's report   By Reuters 6/3/11
Sino-Forest Plunges as Short Seller Block Targets Stock Owned by Paulson  by Bloomberg 6/3/11