Thread by @bauhiniacapital

@jpohhhh @adamscochran @LongShortTrader Points of fact and points of insinuation are always problematic when dealing with a thread which just throws 💩 at a wall.

"John Smith worked too hard in a stressful job, and died of a heart attack." A reader might draw the conclusion that stress killed him. But would have

@jpohhhh @adamscochran @LongShortTrader ignored the part about him smoking two packs of cigarettes, eating 9,000 calories a day, and drinking two six-packs a night.

He may have had a stressful job but saying one and ignoring the other doesn't make it accurate.

@jpohhhh @adamscochran @LongShortTrader Look at 3/31. Net income "struggled" the way Amazon's has. The reason is not much debated. Any equity analyst covering the stock will tell you why.

"They were getting very little actual revenue to grow their empire."

Really? The $65 billion in revenue last year was...

@jpohhhh @adamscochran @LongShortTrader 4/31.

1st sentence: inaccurate. commercial property and tourism properties were never actually driving revenue for them. Ever.

2nd sentence: they have not racked up more than US$300B in debt. The balance sheet is publicly available. H1 results are here: www1.hkexnews.hk/listedco/listc…

@jpohhhh @adamscochran @LongShortTrader 5/31. repeating the mistake.
6/31.
a) the rumors are not as ill-informed as this take on the rumors. It is not a matter of capital (you know, in the financial sense) but of cash flow. And NOBODY, even the hyper bears, suggest what 6/31 does.

@jpohhhh @adamscochran @LongShortTrader 7/31 not going there.
8/31 true, but giant businesses with multi-year projects don't get liquidated that way.
9/31 this could be true in a crypto market, and it has some corollaries here, but again, some knowledge of policy would certainly help. They've been told to stop.

@jpohhhh @adamscochran @LongShortTrader 10/31: Untrue. Evergrande does not own a whopping 2% of all Chinese real estate. This seems made up out of whole cloth.

But yes, bonds of other developers have fallen. Some related, some contagion.

@jpohhhh @adamscochran @LongShortTrader 11/31. Commentary, perhaps ill-informed. The equity price matters little. It provides no measurable financing ability to the company, and never has.
12/31: "creditors are unwilling to accept their bonds" - I am not sure what that means. Bond buyers are unwilling to buy EG bonds?

@jpohhhh @adamscochran @LongShortTrader Possibly. But the Three Red Lines @LongShortTrader mentioned as important? Yeah. EG hasn't been able to increase debt because of that. Creditors ARE demanding payment, and "aggressive restructuring options are being reviewed".

In fact, aggressive restructuring has been in

@jpohhhh @adamscochran @LongShortTrader in the cards for over a year at this point because of the Three Red Lines (written about quite cogently by @Birdyword then at WSJ now at Economist a year ago; or by BBG, or others).

@jpohhhh @adamscochran @LongShortTrader @Birdyword 13-15/31.
There are lots of issues here. Tons.
EG does not have $200bn in assets vs $300bn in unserviced debt. Both datapoints are simply wrong.

What drove Lehman under was not that it was a diversified bank.

And EG's debt is not widely held by banks outside China. Period.

@jpohhhh @adamscochran @LongShortTrader @Birdyword I could go on, because it is a long thread, but why bother...

@jpohhhh @adamscochran @LongShortTrader @Birdyword There are plenty of people on twitter and off who have a decent grip on what is very easy-to-understand story in the big picture, and what is a very complex picture to understand in its potential unwind.