Carson Block has a new short, and his reasoning is super creepy

Muddy Waters, the firm founded by noted short-seller Carson Block, is short St. Jude Medical Inc.

The stock is down almost 7% on the news.

The firm says that it is shorting St. Jude because its pacemakers are faulty and susceptible to cyber attacks.

In short, your heart could get hacked.

From Muddy Waters' report [emphasis ours]:

Muddy Waters Capital is short St. Jude Medical, Inc. (STJ US). There is a strong possibility that close to half of STJ's revenue is about to disappear for approximately two years. STJ's pacemakers, ICDs, and CRTs might - and in our view, should - be recalled and remediated. (These devices collectively were 46% of STJ's 2015 revenue.)

Based on conversations with industry experts, we estimate remediation would take at least two years. Even lacking a recall, the product safety issues we present in this report offer unnecessary health risks and should receive serious notice among hospitals, physicians and cardiac patients.

We have seen demonstrations of two types of cyber attacks against STJ implantable cardiac devices ("Cardiac Devices"): a "crash" attack that causes Cardiac Devices to malfunction - including by apparently pacing at a potentially dangerous rate; and, a battery drain attack that could be particularly harmful to device dependent users. Despite having no background in cybersecurity, Muddy Waters has been able to replicate in-house key exploits that help to enable these attacks.

We should note that St. Jude is in the midst of being acquired by Abbot Labs for $25 billion, and in a statement Abbot said the devices Muddy Waters is slamming is a reason it's interested in St. Jude.

"St. Jude Medical's strong positions in heart failure devices, atrial fibrillation, and cardiac rhythm management complement Abbott's leading positions in coronary intervention and transcatheter mitral repair," the statement said.

The deal is expected to take place in the fourth quarter, pending regulatory issues.

You can read Muddy Waters' full research report here>>