Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of China-based electric motors manufacturer Harbin Electric (Nasdaq: HRBN) crashed and burned today, falling as much as 59% -- yes, in a single day -- on more than 10 times the average trading volume.

So what: Not content with the severe drop caused by a negative research note last week, Citron Research piled on today with an even more damning missive. Among other things, Citron calls Harbin a "fraud" propped up by a "sham" buyout offer, and it posits that the stock is worth closer to $0 than the supposed go-private price tag of $24 per share.

Now what: I'm usually suspicious of these efforts by a small-time research firm to expose small-cap frauds, particularly when the firm is shorting the shares in question as Citron did with Harbin. But this particular whistleblower actually has a bit of a track record, having attacked Chinese software firm Longtop Financial Technologies (NYSE: LFT) with plenty of venom. Trading of that stock was halted in mid-May and remains frozen today as Chinese and American officials sort through a pile of financial fraud claims on reverse-merger stocks such as Harbin Electric.

Harbin's CEO has reiterated his buyout offer along with a bank loan to finance it all -- but Citron says that the loan itself must be fraudulent. You decide who to believe while I treat this stock as toxic. The risks of either buying or shorting shares far outweigh any reward I could imagine at this point.

Interested in more info on Harbin Electric? Add it to your watchlist.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is investors writing for investors.