Spreadtrum Communications Inc. , the latest U.S.-listed Chinese company targeted by short-seller Muddy Waters, denied accusations of a likely misstatement of financial reports and called them "groundless."
Its stock shot 11 per cent higher in premarket trading on the Nasdaq on Wednesday.
The shares had slid more than 30 percent on Tuesday after Muddy Waters said in a letter that it was most concerned about the company's 2010 and 2011 numbers.
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Analysts don't appear to be convinced. "We note that nothing new is actually raised in the letter," Reuters quoted Needham analyst Quinn Bolton as saying, reiterating his "buy" rating and $30 (U.S.) price target.
"We believe Muddy Waters is taking advantage of its success in identifying other fraudulent companies in China to raise questions about Spreadtrum in order to profit from its short position in SPRD."
Spreadtrum is scheduled to hold a conference call with investors later on Wednesday.