Shares of Canada's Fairfax Financial (FFH) tumbled Thursday after Muddy Waters (NYSE:WAT) said it is short the company.
The short-selling firm claimed in its report that Fairfax is far more akin to GE than to Berkshire Hathaway (NYSE:BRKa).
They allege the company "consistently manipulated asset values and income by engaging in often value destructive transactions to produce accounting gains."
"We believe a conservative adjustment to book value should be ~-$4.5 billion or ~-18% lower than reported," said Muddy Waters.
Reacting to the short report, Fairfax said it disagrees with the allegations and insinuations and "would like to assure all shareholders that Fairfax has prepared its financial statements and reporting in accordance with all applicable accounting principles."
At the time of writing, FFH shares are down over 7%.