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Nasdaq and OTC are synonymous. RHAT is an OTC. It is not, however, an OTCBB.
OTC simply means "Over The Counter". As in "trading in a market". Nasdaq is a "market". NYSE and Amex are "exchanges".
OTCBB means "Over The Counter Bulletin Board".
Bulletin Board stocks are the ones Gary's referring to. Calling them "OTC" is the kind like calling a Chihuahua a Wolf. Kinda related, but not the same.
Or, put another way, MSFT is an OTC stock; IFTA is not. It's an OTCBB.
hey bob, why don't you recheck that.
http://biz.yahoo.com/p/r/rhat.html
RHAT is NOT an OTC. AS it clearly says at the top "Red Hat, Inc. (NasdaqNM:RHAT)"
As an OTC looks like this:
http://biz.yahoo.com/p/c/ctvwf.ob.html
CityView Corp. Ltd. (OTC BB:CTVWF.OB)
come on, try to keep up.
joe
I see that OTC vs BB distinction is still evading you, eh? hehe
RHAT is an OTC, not a "big board".
You're welcome.
Bernard that is what the market wants. They do not want long term holders in the OTC. SMall companies are so crippled by the market it is not even funny.
Take now the advisors are saying if you are going to invest buy over $5.00 stocks. However, most brokers I am talking too agree the buys are the ones on the bottom (<$5.00) so it appears the reverse is hapening. When briokers are wanting to sell they issue buys at $60, $40, $20 and once out then it is a sell under $3. MAkes no sense but if they are issuing a sell and the trading appears someone is accumulating I wonder who that could be. Could the brokers be buying up these undervalued and once it moves over $5.00 the broker analysts will suddenly start issuing buys again. Of course if they are selling into the buy they are making tons of money.
Trading ... for the short term is one about all you can do but savvy are getting positions in select stocks that they feel will be move back to justifiable value in the next year. I remember Nextel at $8 back years ago and I was told no it was not a buy yet and it wasn;t at $12 but at $18 the broker told me it was. The double out. This is the way it is in the market.
Of course they were wanting me to buy a another stock that fell since it was rec to me.
Never have been able to understand how in the world so many brokers cpould not pick a winner if their life depending on it. The stock market is the only industry I know where you can be 100% wrong and keep your license.
Not only that but it is the only place I know you can sell what you do not own for gain.
:=) Gary Swancey
hehehe, nice article... I used to "try to" invest in bb stocks, but no more, trading is more fun for me. I won't even invest in big board stocks... that's just me. Goodnight Gary!
signed,
Bernard
Oh, it’s just an OTC!
How many times have small investors heard this line as an excuse for the tricks used in the OTC market? It has gotten so blatant that people actually confess to being ex-market makers, financiers and promoters that manipulate the system to avoid proper disclosure. Touting and pumping they move to the chat sites to do their damage control. When these types are discovered by posting TMI (too much information), they then attack and feel extremely comfortable that the SEC will not look into anything because “Oh, it’s just an OTC!”
Every company is searching for the product or discovery that will be as essential to the general public. From the simplistic innovated coat hanger to the necessity of electricity. How many times have we heard about a start up company with cure for cancer or AIDS, or a new gas saving product, or new ore extracting product that will revolutionize the industry? Of course these indispensable discoveries and products will change our everyday lives. One has to ask… "just how many of these stories are actually true?" even though “Oh, it’s just an OTC!”
Thus this excuse makes the OTC an even more a deceptive encyclopedia where a lot of these types of stories reign. Most of the time these ideas are merely the catalysts for the companies to be perfect stock printing presses. Wherever they can, they sell the idea and thus along with the story comes the selling of the stock. Since the idea or story is not good enough for banks, easy and creative financing vessels are sought such as; convertible preferred stock or other convertible vessels. But the public has been programmed to accept this type of financing because “Oh, it’s just an OTC!”
The public rarely reading filings and thus are investing blindly. The few that do take the time typically have no clue as to what they are reading. The OTCs in order to be listed must pay all the expenses of reporting just like the bigger markets. There are OTC's in which the filings look better than a lot of the bigger markets even though the bigger markets can get full coverage in the financial world. OTC’s filings are about the only public media that is available because CNBC or any other media won’t talk about OTC's and the excuse given most of the time is “Oh, it’s just an OTC!”
However, unlike the bigger markets there is no ECN or Internet for the OTC's and most traders have to make calls to make fills. Forces in the market can easily manipulate supply and demand of the OTCs and do so on a daily basis. How often have you not gotten an order filled on either side and the excuse is “Oh, it’s just an OTC!”
Recently, DarynFLeming wrote several articles on OTC's. Most know this is WallStreetWest and numerous other promotion sites that gets compensated and sells into the profiles. But his article focuses on not going long in the OTC. One excuse is that OTC companies have minimal assets and no revenue or earnings and lots of them have little or no money. Of course do not bring up the big board stocks for example RHAT that has not shown a positive EPS in years but hey their revenues are increasing! And you can’t figure a lot of the fundamental based formulas like (debt/income ratio, price/earnings, etc.) on MKL, BEM, ATF, AVE, CERS, BTY, CSWC, CEPH, BSY, or even the Dow Jones Company (NYSE:DJ)! That this logic works on OTC's, but does not apply to stocks that are on the bigger markets even though they do not have solid earnings and are over $50.00 a share is ludicrous. Of course many of these big issues rarely have a lot cash either. But these are based on supply and demand and they can get full media coverage. But poor assets, earnings, etc. is a solid excuse for the OTCs because you know… “Oh, it’s just an OTC!”
You should realize by now that the market hates long term investors in the OTC's. Most articles about the OTC are so blatantly biased and insulting to people’s intelligence that it is not even funny. It seems all these articles about the OTC focus on “Hey do not invest! Play or trade it short term”, that way the manipulators wont get hung in an OTC and end up losing money because they shorted it and the flipping investors won't sell so they can cover no matter now much they bash it. Of course the bashing always seems to focus on the excuse of “Oh, it’s just an OTC!”
Maybe one day the SEC and the NASD will open their eyes to the market over all and the pumping analysts, stock manipulators, and bashers which go hand in hand with the out of control shorting in the market. Supply and demand is not the primary function. It is how much can I sell of what I do not own to make as much money as possible and if I get hung I can always bash the fire out of it mainly because “Oh, it’s just an OTC!”
It’s not fair because I should be able to rip, scalp and make money on them. You should wonder why this little term is a solid excuse for anything considering what is in the bigger markets. C’mon in reality that’s what the OTC's are for, Manipulation for profit. So my opinion shifts to manipulation every time I hear the excuse “Oh, it’s just an OTC!”
:=) Gary Swancey
There sure must be a bunch of short sellers on the Aqa Vie board LOL. (9)(9)
Yep isn't it amazing that the only people that dominate the boards are those without an underlying basis and all they have is convenient speculation and convenient reasoning.
Great article.
:=) Gary Swancey
Great article about message boards
A Requiem for the message boards
Once a boards enthusiast, our columnist explains why he's had it.
By David Futrelle
If you ever feel like making a lot of enemies in a hurry, wander onto the message boards at Yahoo!, Silicon Investor or Raging Bull and say something less than flattering about, oh, any stock you feel like. It doesn't matter if that company's CEO has fled to the Caymans with his hairdresser and a briefcase full of Ben Franklins. If you persist in your criticism for more than a post or two, you'll quickly find yourself the least popular person at the party. In fact, you'll find yourself labeled a "basher"--roughly the equivalent of being charged with high treason.
Stock message boards have long been celebrated as a democratizing force in the world of finance. This is a crock. They are democracies only if you share the same rosy opinions as everyone else there. Whenever a basher speaks up (and basher, mind you, is liberally defined--it can apply not just to a poster who accuses a company chairman of pedophilia but to anyone who might note that 120 times earnings is an awful lot to pay for a share of Cisco) you can be sure that someone (or a half-dozen someones) will tear into him with all the subtlety of Mao's Red Guards during the Cultural Revolution.
It's a truism on the boards that anyone who has anything critical to say about a company must be a short-seller (an investor who has placed a bet that a stock will go down rather than up). Perhaps this is true. But many basher-bashers have also convinced themselves that most stock critics are the minions of vast (usually unnamed) short-selling cabals that pay handsomely for pessimistic posts. Various documents purporting to explain "How Bashers Get Paid" circulate widely. One claims that bashers are paid (by whomever or whatever it is that pays them) according to the number of replies their posts generate. "A basher will attempt to milk three to five replies per post at one to two dollars each," says the anonymous text.
Basher paranoia is somewhat more understandable on the penny-stock boards, where stock manipulation is rampant. But there the real problem isn't the bashers--it's the boosters. In a pump-and-dump scheme, hypesters buy a worthless stock, tout it incessantly and then dump their holdings for a quick profit after enough suckers have piled on. Strangely enough, while the Securities and Exchange Commission has brought plenty of cases against Net pump-and-dumpers in the past few years, it has yet to find a single bash-for-pay conspiracy in action.
Since they stand to gain when others lose, it is easy to demonize stock bashers and short-sellers, to see them as "black of heart," as Wall Street wag Fred Schwed put it in his 1940 classic Where are the Customers' Yachts? After all, isn't it somehow un-American to hope a company fails, somehow evil to want a stock to go down? Maybe so, but even Schwed affirmed that a wide diversity of opinions on stocks is better than a single Pollyannaish view. "Dictatorships always immediately ban short-selling, since it is axiomatic that no professional pessimists are going to be tolerated," Schwed quipped at a time when Americans had good reasons to worry about foreign dictators. "But whatever the reader may think of totalitarian philosophy in general, I do not think he will envy them for the condition of their security markets."
Just three or four years ago, stock message boards promised to become a liberating force, a public forum free from the tyranny of the experts, where investors could go to compare notes on stocks and hash out disagreements about valuations. Today the boards can only be regarded as a failed experiment. Remember the so-called Iomegans at the Motley Fool during the late 1990s--the herd of investors who convinced themselves that a small computer disk-drive manufacturer in Utah was the next Microsoft and then proceeded to follow the stock off a cliff? That may have been the first indication that stock evaluation is not best done by committee. And these days it's hard to find any message board that hasn't degenerated into an embarrassing squabble between dogmatic longs and beleaguered (if equally dogmatic) shorts. For most serious investors, it can finally be said: Stock message boards are an utter and total waste of time.
At its root, the boards' problem rests with their mix of unquestioning, optimistic conviction and intolerance of dissent. These are two qualities you can find in many moments of America at its worst. The mandatory positivity many posters want to enforce is reminiscent of the blandly dogmatic (and thus menacing) Boosters' Clubs satirized by Sinclair Lewis in his 1922 novel Babbitt. The clubs, fraternal organizations for gung-ho local businessmen, offered "Booster Brothers" a place they go could go to exchange business cards and snappy pleasantries--so long as they didn't suggest that anything was less than peachy keen. Never was heard a discouraging word--it was practically in the bylaws. There was quite a bit of this sort of boosterism in the '20s. You may recall how that decade ended.
http://www.money.com/money/depts/websmart/webwatch/archive/000725.html
David Weed
aka the Bird of Prey
www.warp-drive.com
Good article BOP ... very very good. Kudos!
:=) Gary Swancey
What is an "underlying basis"?
We've seen them so many times...the posts that scream "this stock is going to the moon!" or "the stock is going nowhere" with no other commentary whatsoever. We ask "why do you say this?"
What we are looking for is the posters "underlying basis", the reason they think the stock will go up, down or nowhere.
But what is an underlying basis?
Does it require hours of research, reviewing the filings with a magnifying glass?
Does it require visiting the company? Talking with the CEO? Touring the facilities?
Or can it come from reading tea leaves?
The answer for these questions is yes. For different individuals any one or any combination of the above could be sufficient research before buy or selling a position. There are many ways one can evaluate a stocks suitibility for investment. As varied as the investors are themselves, there are many forms of underlying basis. Some will research every scrap of paper available and others will find the date of the company's inception and plot it's astrological chart to try and come up with a reason to buy or sell a particular stock. Still others with consult psychics, review the stocks trading history or ask friends and family what they think. SOme of the most successful investors of all time based their investment choices on the items they had in their pantry!
Is any one form of what is often called "due diligence" right or wrong?
No, an investor may have been sticking pins in voodoo dolls for years to try and gain an upper hand on the market. If that person is convinced that his "system" is working then, at least in his mind, it is a valid means of evaluating investments.
Some folks have been enormously successful with some truly off the wall investment strategies. How can you argue with someone who's investment style is based on the outcome of his favorite sports teams games, when he has made a million dollars doing it?
Of course, here on the internet we often don't know what a particular persons investment strategy is. Unfortunately many are unwilling to share their personal styles, either to protect the preferred style's effectiveness or out of embarrassment. Given the cruelty expressed by many so called human beings on the internet this is entirely understandable. Of course many of those heartless folks don't reveal their strategies either!
Some folks may base their investment decisions on what they find on stock message boards. While many would consider this the epitome of foolishness, a few have been successful doing so. My point in presenting this is that regardless of one's personal investment style...you could be right! Don't fear the bully's, make them reveal their "underlying basis". What you may discover is that they don't have one or their style may lead you to more successful investing. Either way you win!
In conclusion, before you make that "to the moon" post...think about "why" you think it's going to the moon...and say so! After all one of your readers may be reading tea leaves to pick stocks and the leaves say it's going down!
David Weed
aka the Bird of Prey
www.warp-drive.com
Thanks for updating the Ibox Gary, there a lot of good info there, still reading it!
muel <ggg>
Thanks for the reply David, I know Gary is a busy man!
ProfitOften
See ya,
muel <g>
Muel,
I have notified Gary that he needs to update the links. Unfortunately (or fortunately in some cases) only the Chair can edit the Ibox. I am sure he'll get it fixed soon.
David Weed
aka the Bird of Prey
www.warp-drive.com
Gary or David, there's a real plathoura of information in the Ibox here. It's a real shame all the links are to the beta version of Ihub, every one of them takes you back to the Home Page! lol
Feel free to delete this post after you fix the links!
ProfitOften
See ya,
muel <g>
Wall Street under scrutiny
Follow up to A number of investigations into Wall Street shenanigans are under way May 17th 2001 From The Economist print edition
http://www.economist.com/finance/displayStory.cfm?Story_ID=626583&CFID=2344876&CFTOKEN=71593...
A penny in whose pocket? May 24th 2001 / NEW YORK
From The Economist print edition
http://www.economist.com/finance/displayStory.cfm?Story_ID=635389
Were investment banks crooked when they made billions of dollars from the Internet bubble?
IT ENJOYED the dotcom party as much as anyone. But now that the whole thing has ended messily, Wall Street has become everybody’s favourite scapegoat. Its analysts are accused of abandoning objectivity to tout shares that their investment banks underwrote. Underwriters are said to have set the share price too low in initial public offerings (IPOs), so as to ensure a huge jump in the price when trading began. That jump in turn enabled investment banks to reward favoured clients who were allocated shares in the IPO, which clients could instantly sell at a fat profit. To compound the rascality, the banks shared in those profits by demanding return favours from the clients.
Wall Street is suddenly taking all these accusations seriously. That is in part to reassure investors that IPOs are still worth investing in, and so to help to revive a market that was once lucrative. But it is mainly out of fear of the large fines, or even jail sentences, that might result from investigations under way.
The heads of research at America’s leading investment banks are now working together on a code of best practice for analysts. This is said to include severing the link between an analyst’s pay and the revenues a bank earns on any deal he works on. (This practice is so deeply entrenched that it will be remarkable if such a rule ever sees the light of day.) In the same spirit, the Association of Investment Management and Research said on May 21st that it is producing a paper on “preserving” research integrity and promoting a set of “research objectivity standards”. Prudential Securities has given up underwriting altogether, opting to stand or fall on the independence of its research. Admittedly, it was not a strong underwriting force to begin with.
Wall Street also faces congressional hearings in June about its conflicts of interest. It is conceivable that these could become dotcom show trials, with former gurus being accused of fleecing the public by championing the likes of Amazon and Priceline. Even scarier for investment bankers are three probes into accusations of wrongdoing in the underwriting process, along with a host of class-action lawsuits on behalf of suffering investors. These investigations—by the Securities and Exchange Commission (SEC), the regulatory arm of the National Association of Securities Dealers (NASD) and a criminal one by federal prosecutors in Manhattan—take in most of Wall Street’s leading firms.
Credit Suisse First Boston (CSFB) has borne the brunt of the bad publicity. It is the only target so far of the NASD inquiry, which is further advanced than the others. Unlike the SEC, which is examining industry-wide behaviour, the NASD is (as usual) putting its energies into catching one firm, after which, precedent established, it can go after the others.
Some at CSFB say that the bank is a victim of over-zealous regulators, spurred on by competition between the NASD and the SEC. They detect an attempt to demonise Frank Quattrone, the bank’s high-profile dealmaker in the technology sector. There has not, after all, been a Michael Milken for the best part of a decade. Internal inquiries at CSFB appear to have exonerated Mr Quattrone from any wrongdoing. Still, the bank has suspended two employees, for “unacceptable conduct” that supposedly broke the firm’s own rules, though not the law. Some observers wonder if CSFB is preparing to wriggle off the hook by implying that any abuses were the acts of a few rogue brokers.
Sharing the shares
The main focus of the investigations is the terms under which underwriters allocated shares in IPOs. This is no simple matter. Nobody disputes that the underwriters can choose to whom they distribute shares, nor that they may favour clients that give them plenty of business. Indeed, one preoccupation of regulators is that shares in IPOs have not always been allocated in proportion to the amount of broking business a client does.
The chief concern is about what other clients did to get an outsized allocation. Did they, for instance, hand back to the underwriter some of the profits from selling the shares, by doing a lot of commission-paying business shortly afterwards? Such commissions could be construed, in effect, as part of the underwriting fees earned by the bank. They should therefore have been disclosed. Whether this is so in law may depend on whether such kickbacks can be proved to be a binding contract, rather than a vague indication of intent. Non-binding banter—“I’ll give you shares in this IPO, you take care of me later”—often takes place with good clients, say Wall Streeters.
To get shares in a hot IPO, clients may also have agreed to buy shares in future IPOs that were less exciting. Or they might have promised to buy additional shares in an IPO once trading had begun. This would have amounted to market manipulation. Innocent, plead the banks. To ask clients if they would be willing to buy in the after-market is to help learn how committed they are to the shares—not planning, in other words, to “flip” the shares as soon as trading begins.
The potential revenues from cosy arrangements between Wall Street and its friends were enormous. According to Jay Ritter, an economist at the University of Florida, official underwriting revenues were $7.3 billion in 1999-2000. But the so-called “money left on the table”—instant profits available for clients allocated shares in an IPO that soared on the first day of trading—was $66 billion. Some of that money was certainly split with the underwriters. Strangely, issuers didn’t seem to mind the intentional underpricing of their IPO. A big first-day pop in their share price was viewed as a marketing success.
Seasoned regulators admit that it will be hard to prove that Wall Street firms were systematically up to no good. It will take, at the least, a lot of incriminating tapes and e-mails to prove that brokers overstepped the line between vague requests (“take care of me”) and the demanding of binding promises.
Perhaps, just perhaps, the market is already reforming itself. A few IPOs are now taking place, but not with the huge first-day premiums of yore. Issuers are taking a closer look at the auction-based IPOs pioneered by W.R. Hambrecht, an investment-banking boutique in California. These act to tease out the issue price that pretty much equalises supply and demand and minimises the first-day pop—and, along with it, the opportunity for kickbacks to underwriters.
end of article
******************************************
:=) Gary Swancey
Discount Stock Brokers Ranked - Deep Discounters
Webstreet has been purchased by E*Trade thus I did a little reseach on Online brokers.
Online Investment Services - May 20, 2001
Compiled by Don Johnson.
http://www.sonic.net/donaldj/brokers1.html
Some Online discount brokers. (Site has a lot of specific Information.
Interactive Brokers [Timber Hill]: $1 and up per trade.
LowTrades.com: $4 per trade.
Freetrade.com: $5 (limit) and $0 (market) per trade.
RJT.com [R. J. Thompson Securities]: $5 per trade.
Wang Investments: $8 and up per trade.
AF Trader [America First]: $9.95 per trade.
Firstrade.com: $9.95 (limit), $6.95 (market) and up per trade.
Trading Direct: $9.95 per trade.
A. B. Watley $9.95 and up per trade.
InvestIN.com Securities: $9.95 and up per trade.
Wingspan: $9.95 (small accounts), and $7.95 (large accounts), and up per trade.
Datek: $9.99 and up per trade.
Brown: $10 (limit); $5 (market) and up per trade.
Financial Cafe: $11.95 (limit), $2.99 (market) per trade.
InvesTrade: $11.95 (limit); $7.95 (market) per trade.
Scottsdale: $12 (limit); $7 (market) per trade.
WSEi.com [Wall Street Equities]: $12 and up per trade.
Patagon.com: $12 and up per trade.
MyDiscountBroker.com $12 and up per trade.
U.S. Rica Financial: $12.50 down to $7.45 and up per trade.
Ameritrade: $13 (limit); $8 (market) per trade.
EmpireNow.com [Empire Financial Group]: $12.95 and up (limit, Nasdaq), $11.95 and up (limit, listed), $6.95 and up (market) per trade.
Web Street: $14.95 per trade.
Net Investor: $14.95 (limit), $8.95 (market) per trade.
FBR.com: $14.95 and up per trade.
UF Securities [UMC]: $14.95 and up per trade.
Vision Trade: $14.95 and up per trade, down to $10.95 per trade. Closing, apparently.
Muriel Siebert: $14.95 and up per trade.
:=) Gary Swancey
Gary,
I've noticed that you have been discussing the number of securities that trade fewer tha 100K per day and such.
As I have been following that same thing for some time I was wondering if you had any ideas in relation to the following.
As you may well know many of the low volume issues also have the problem of a large number of outstanding shares. When these two difficulties are combined, the result is a stock that basically cannot move in price beyond a 1 or 2 cent swing regardless of volume. Since many of these issues often have huge short positions outstanding the possibilty of a *run* is unlikely.
In order to rectify this situation many CEO's resort to an RS. while this often solves the large OS problem, it creates a PR nightmare with all of the angry shareholders that feel cheated. This negative energy often lowers the stock price to the levels just before the RS.
Can you put that brain of yours to work on a solution to the above problem that doesn't have all of the negatives associated with the RS?
David Weed
aka the Bird of Prey
www.warp-drive.com
Why do people post to Stock related message boards?
The psychology of chat rooms.
Most folks come to a stock message board AFTER they have bought a stock. They come looking for approval and a confirmation of the "rightness" of their decision to buy. Thus, their first post is often "Isn't XYZ a great company?"
If the stock is moving up they usually find many supporters and a kind of mutual admiration society existing on the board. If it isn't they are often blasted by the folks that were making similar posts just a few weeks or months back. This group represents the most vocal bunch on a thread. The "investors" that are in a losing position.
Mostly they are split into two camps:
The Hopeful, who blame the negative "bashers" for the downfall of the stock price. "It would go up if you'd stop scaring off new investors!" is their mantra.
The Bitter, lashing out at everyone because they have a losing position. Many times their complaints are justified but because they have allowed emotion to cloud their presentation (as well as their judgement) all they usually end up doing is arguing with everyone.
The bulk of the posts on many boards consist of the exchanges between these two groups. Each has a vast arsenal of accusations to fling at each other or just at anyone in particular. This is especially true in the OTCBB arena where factual information of a company can be sketchy if available at all. These exchanges often disintegrate into shouting matches affectionately referred to on the Internet as "flame wars". Imagine the foulest mouthed kids going at each other on an elementary school playground. It is neither pretty nor fun to watch.
Both the hopeful and the bitter often vilify the remaining group, partially because of its decidedly small numbers, partially because they remind the "investors" of what they didn't do.. These are the folks that have taken the time to actually do some research and form an opinion based on the facts. Armed with their evidence they often try to convince the hopeful that the situation is hopeless or that the bitter have a reason to be hopeful. Alas, there is not much evidence of a high success rate. Often they are on the receiving end of abuse from both the hopeful and the bitter. Seems that sometimes people become uncomfortable with the knowledge that they have only themselves to blame.
The mutual admiration societies can be just as hard on these researchers if their research is predicting impending declines. Even after the predictions come true the researcher may have Cyberstalkers following him everywhere he goes warning: "This guy will destroy your stock! Everywhere he goes the stock gets killed! He must be an insider or MM or P&D! He is out to steal your money!" or something like that.
Then there is a very special group. They are not really interested in anything beyond the flaming. All they want is to keep the fires burning. Spewing nothing but hatred in their posts they will switch sides at a whim if it looks like one side is winning. Strangely these individuals often roam the net in packs, like wolves, till they find a suitable victim. Once found they will hound the victim wherever they go, giving no peace until the victim removes themselves from the public eye.
My point for all of this is a warning to all that would seek to gather stock information from a stock related message board. Don't believe everything you read on the Internet. Your best bet to avoid losing money and becoming one of the bitter is to become a researcher. Know why you should or should not buy a stock before you put your money down.
Good luck to all.
David Weed
aka the Bird of Prey
www.warp-drive.com
IHUB = Informative Harmoniously Understood Boards Part 2
The Rules
This post is intended as an overview of the rules of engagement for participating on Investors Hub, or, more specifically, what to expect of me based on what some of you already know of me based on my role at Silicon Investor.
For the most part, there won't be any difference. For example, spam, threats, and invasion of privacy will continue to be dealt with swiftly and severely.
Spam
The definition of "spam" that we'll use here is: "Multiple posts of the same or essentially the same content." If someone spams the site, they could receive a warning or account termination, depending on the extent to which they did it. I have never been tolerant of spam, and never will be, as it's often a tool used by scamsters and subtracts dramatically from the value of a site to the community who uses it.
Generally speaking, two copies of a post is the limit, and one of those copies must be in a thread specific to the stock and the other can be in any other thread that isn't specific to a particular stock (like a "Trade of the day" type of thread). More than that, and it's spamming.
Advertising
Advertising and Spam are not the same thing, although ads are frequently spammed. A post being advertising doesn't necessarily make it spam, although advertising will be strictly limited as well.
Links to one's site in a thread header are acceptable if the purpose of the thread and header isn't strictly to advertise the site.
Links within posts are only acceptable if they're part of a non-advertising message and if the link is either in support of the (on-topic) content of the message itself, or if the link is included as part of one's signature line and is to the writer's homepage, provided the homepage isn't a paid site or a site with ads; essentially that the link isn't an attempt to make income by enticing users to visit it. Examples: If I sign off a post with "Bob Zumbrunnen, http://www.bobzumbrunnen.com", it's not advertising. If I discuss technical aspects of a stock's recent price activity and post a link *directly* to a graph illustrating what I'm talking about, it's not advertising. If I write a post asking readers to check out a newsletter I'm offering, it's advertising. If I do it more than once, it's also spam.
As far as your profile goes, anything goes, to a point. Feel free to use your profile to advertise another site as shamelessly as you want. All other parts of the Terms of Service apply, but if you want to put a blinking banner in your profile, go for it. If you're a good enough writer that people want to go to your profile to see your other posts, you deserve the hits you get.
Still pretty gray? I'll update with examples as needed.
Multiple threads per ticker
Effective immediately, there is no "one thread per ticker" rule. The number of threads associated with a particular stock needs to be kept within reason, but it'll be my job to ensure that it's kept reasonable. If you want a thread that discusses daytrading QCOM and the existing thread focuses more on LTB&H (Long Term Buy & Hold), feel free to start a daytrading thread about QCOM. If the QCOM thread is too bullish for your tastes and you don't feel welcome there, start a QCOM thread for the bearish perspective.
We do, however, want to keep it "within reason". It doesn't do anyone any good if all of the information relevant to QCOM is divided into a dozen threads. Thread dilution needs to be kept at a minimum. If QCOM issues a press release, don't create a new thread for it. Post it to an existing thread. And if there are 4 threads about QCOM, posting the same thing to all 4 threads would be considered spamming.
Exception: For OTCBB and Pink Sheet issues, the limit will remain at one board per ticker. This is subject to change in the future, but I want to see how it goes with Listed and Nasdaq issues first.
Personal Attacks
At Silicon Investor, quite a bit of ad hominem stuff was permitted. This aspect will be dramatically different here.
I want to hold our community here to a higher standard. And because of the Chairman of the Board concept, there should be less of a precedent problem, or situations where someone got away with calling someone else a moron earlier so it must be okay for everyone to do it.
Another thing that'll help is the existence of the "Parking Lot" thread. Want to tell someone what you really think of them? Go there. All the more reason for us to have much lower tolerance of that kind of stuff in the other threads.
Aside from the Parking Lot thread, no kinds of personal attacks will be permitted, whether they're directed at individuals or groups.
General Rudeness
This is something that wasn't addressed on Silicon Investor at all. It will be here.
Excluding vulgarity, personal attacks, threats, and invasions of privacy, members will be able to conduct their own non-stock threads in any manner they see fit. If your thread is not specific to a particular stock or group of stocks, feel free to post in any way you see fit.
For example, if you have such a thread and post "This stock is a POS and the CEO works part-time at my estate pulling dandelions with his teeth. If this turd ever pokes its ugly head above $5 again, I'm going to short it until you feel some serious pain.", that would be acceptable.
However, if you go to the thread that's specific to that stock and post the same thing, you're going to get a warning or suspension. If you want to post your negative opinion on the stock-specific thread, do so in a civil manner. For example, "This stock is a poor investment choice because the CEO's only prior experience is in lawn maintenance and I will see any rally as an opportunity to re-enter my short position."
On threads that are specific to stocks, civility is expected.
Warnings
On Silicon Investor, I gave suspensions far more often than I gave warnings. This was for a number of reasons:
1. Oftentimes, my warnings were met with very extreme personal attacks and threats against myself. Surprisingly, far less so than suspensions.
2. There was no easy mechanism for tracking warnings.
3. Warnings are very time-consuming compared to suspensions.
4. Having clicked "I Agree" on the Terms of Use was considered warning enough.
5. I was required to communicate a certain way with users; not in the style most comfortable to me.
On Investors Hub, I will continue my philosophy of my role being more "moderator" than "punisher", and further it. This includes giving warnings for all but the most blatant of violations. The availability of the Chairman of the Board concept to reduce my workload is the main reason I'll be able to do this, and when I communicate with members here, I'll be able to do so in the ways I see as appropriate.
So, if you get a warning, please just take it in the spirit intended and know that it wasn't a suspension.
Authored by IHUB Bob
:=) Gary Swancey
IHUB = Informative Harmoniously Understood BoardsPart 1
The Rules
This post is intended as an overview of the rules of engagement for participating on Investors Hub, or, more specifically, what to expect of me based on what some of you already know of me based on my role at Silicon Investor.
For the most part, there won't be any difference. For example, spam, threats, and invasion of privacy will continue to be dealt with swiftly and severely.
Spam
The definition of "spam" that we'll use here is: "Multiple posts of the same or essentially the same content." If someone spams the site, they could receive a warning or account termination, depending on the extent to which they did it. I have never been tolerant of spam, and never will be, as it's often a tool used by scamsters and subtracts dramatically from the value of a site to the community who uses it.
Generally speaking, two copies of a post is the limit, and one of those copies must be in a thread specific to the stock and the other can be in any other thread that isn't specific to a particular stock (like a "Trade of the day" type of thread). More than that, and it's spamming.
Advertising
Advertising and Spam are not the same thing, although ads are frequently spammed. A post being advertising doesn't necessarily make it spam, although advertising will be strictly limited as well.
Links to one's site in a thread header are acceptable if the purpose of the thread and header isn't strictly to advertise the site.
Links within posts are only acceptable if they're part of a non-advertising message and if the link is either in support of the (on-topic) content of the message itself, or if the link is included as part of one's signature line and is to the writer's homepage, provided the homepage isn't a paid site or a site with ads; essentially that the link isn't an attempt to make income by enticing users to visit it. Examples: If I sign off a post with "Bob Zumbrunnen, http://www.bobzumbrunnen.com", it's not advertising. If I discuss technical aspects of a stock's recent price activity and post a link *directly* to a graph illustrating what I'm talking about, it's not advertising. If I write a post asking readers to check out a newsletter I'm offering, it's advertising. If I do it more than once, it's also spam.
As far as your profile goes, anything goes, to a point. Feel free to use your profile to advertise another site as shamelessly as you want. All other parts of the Terms of Service apply, but if you want to put a blinking banner in your profile, go for it. If you're a good enough writer that people want to go to your profile to see your other posts, you deserve the hits you get.
Still pretty gray? I'll update with examples as needed.
Multiple threads per ticker
Effective immediately, there is no "one thread per ticker" rule. The number of threads associated with a particular stock needs to be kept within reason, but it'll be my job to ensure that it's kept reasonable. If you want a thread that discusses daytrading QCOM and the existing thread focuses more on LTB&H (Long Term Buy & Hold), feel free to start a daytrading thread about QCOM. If the QCOM thread is too bullish for your tastes and you don't feel welcome there, start a QCOM thread for the bearish perspective.
We do, however, want to keep it "within reason". It doesn't do anyone any good if all of the information relevant to QCOM is divided into a dozen threads. Thread dilution needs to be kept at a minimum. If QCOM issues a press release, don't create a new thread for it. Post it to an existing thread. And if there are 4 threads about QCOM, posting the same thing to all 4 threads would be considered spamming.
Exception: For OTCBB and Pink Sheet issues, the limit will remain at one board per ticker. This is subject to change in the future, but I want to see how it goes with Listed and Nasdaq issues first.
Personal Attacks
At Silicon Investor, quite a bit of ad hominem stuff was permitted. This aspect will be dramatically different here.
I want to hold our community here to a higher standard. And because of the Chairman of the Board concept, there should be less of a precedent problem, or situations where someone got away with calling someone else a moron earlier so it must be okay for everyone to do it.
Another thing that'll help is the existence of the "Parking Lot" thread. Want to tell someone what you really think of them? Go there. All the more reason for us to have much lower tolerance of that kind of stuff in the other threads.
Aside from the Parking Lot thread, no kinds of personal attacks will be permitted, whether they're directed at individuals or groups.
General Rudeness
This is something that wasn't addressed on Silicon Investor at all. It will be here.
Excluding vulgarity, personal attacks, threats, and invasions of privacy, members will be able to conduct their own non-stock threads in any manner they see fit. If your thread is not specific to a particular stock or group of stocks, feel free to post in any way you see fit.
For example, if you have such a thread and post "This stock is a POS and the CEO works part-time at my estate pulling dandelions with his teeth. If this turd ever pokes its ugly head above $5 again, I'm going to short it until you feel some serious pain.", that would be acceptable.
However, if you go to the thread that's specific to that stock and post the same thing, you're going to get a warning or suspension. If you want to post your negative opinion on the stock-specific thread, do so in a civil manner. For example, "This stock is a poor investment choice because the CEO's only prior experience is in lawn maintenance and I will see any rally as an opportunity to re-enter my short position."
On threads that are specific to stocks, civility is expected.
Warnings
On Silicon Investor, I gave suspensions far more often than I gave warnings. This was for a number of reasons:
1. Oftentimes, my warnings were met with very extreme personal attacks and threats against myself. Surprisingly, far less so than suspensions.
2. There was no easy mechanism for tracking warnings.
3. Warnings are very time-consuming compared to suspensions.
4. Having clicked "I Agree" on the Terms of Use was considered warning enough.
5. I was required to communicate a certain way with users; not in the style most comfortable to me.
On Investors Hub, I will continue my philosophy of my role being more "moderator" than "punisher", and further it. This includes giving warnings for all but the most blatant of violations. The availability of the Chairman of the Board concept to reduce my workload is the main reason I'll be able to do this, and when I communicate with members here, I'll be able to do so in the ways I see as appropriate.
So, if you get a warning, please just take it in the spirit intended and know that it wasn't a suspension.
Authored by Admin Bob
:=) Gary Swancey
The Other Side of SPAM
We hate getting those unwanted messages in our inbox. People have gone to great lengths to try and eliminate Spam. But is the Cure worse than the Disease?
It is easy to report Spam. Several websites exist that will automatically forward your complaint to the authorities (ISP's). They simplify the process to allow the nearly illiterate the ability to protect their email boxes from Unsolicited Commercial Email (UCE or Spam). At first glance this looks like a good thing. Make it easy to catch Spammers and fine them (typically $200 per email sent) for abusing the system. However a deeper investigation reveals some problems. It seems that the services are not validating the reports before forwarding them to the ISP's. Additionally, there are no measures in place to prevent a report for a single "offense" being repeated. Considering the severity of the punishment handed down by many ISP's (instant termination, no questions asked) a potential for abuse exists.
Recently I was falsely accused of spamming. Fortunately I had all of the necessary information to prevent being shut down. But it took the better part of a week to get things fixed. Why? Because a single individual decided that an email was spam. That lone individual has access to websites that allow him to act as victim, judge, jury and executioner. He was able to blast his accusation to multiple locations, multiple times, and heretofore without fear of retribution. In essence he was allowed to spam my ISP, along with several others and because he was part of the Crusade to stop spam, his message was Gleefully forwarded without question. Were it not for a very good working relationship with my ISP. My site would likely have been terminated immediately.
There was only one little teeny tiny problem with the spam report. Seems the user forgot to mention he opted in to my list! That means he requested to be sent email! I take the spam issue very seriously. And make certain that I do everything possible to avoid sending an unwanted email. I have gone well beyond the legal requirements to protect myself from spurious complaints. Implementing these measures adds to the cost of doing business on the net. And remember the reason for these measures is to protect ourselves from false or invalid complaints. Thankfully these measures prevented a major catastrophe. All is once again well in my Internet kingdom.
As a result I am changing a policy on my website and am suggesting that other Business owners do the same.
Since the Anti-spam sites and most ISP's have a stated policy wherein they state a fine of $200 per spam email sent. I propose a similar fine for the false reporting of spam.
My suggested text is as follows:
Placed immediately following the "we don't use Spam section."
Filing false Spam reports are considered as bad as spamming itself. As such, for each false report the reporter and the services that forward the false report will be charged $200 or actual damages, whichever is higher.
In the above case my faux-reporter would be charged $1200, as would the firm that forwarded his message six times.
David Weed
aka the Bird of Prey
www.warp-drive.com
Dave, I agree that this poster(s) did not come here to discuss or even remotely offer a solid opinion with an underlying basis. They refuse to offer an underlying basis as a matter of fact.
They came to make sly remarks and play a word game, which is off topic. One further expresses he is not about solid discussion only thread disruptions in his own words, "we the members going to stand up and poke holes in their little warm fuzzy balloons, and have a little fun along the way" which he has done historically, Disruption of threads. But as he posts further he believes this is a financial thread in "it is deadly to financial discussion in which all information and perception must be entered to ensure a full and balanced basis for analysis." I have no clue what that means here on the MY PERSONAL THREAD.
However, the point is he is out to challenge the IHUB Principal & moderation (censorship) and to disrupt where ever he can as cleverly as he can. So after walking away for an hour or so and thinking carefully I agree because of the challenge to Bob and questioning certain scenarios the concept of IHUB moderated thread is all this is about.
In conclusion I like you feel these posters are here solely to disrupt. I will delete all this mess and delete any further posts by these particular gentlemen on this thread. This is not a financial site but{b} my personal site{/b} and I do not have to take this type of underhandness.
If they want to challenge the IHUB concept then they can create their own personal threads or to the parking lot.
:=) Gary Swancey
Gary,
Although I know that as director I can, will and have removed objectionable posts. It has always been my policy to defer to the Chair when the Chair is available.
IMHO, posts #380,382,384, & 386 should be removed on the following grounds:
1. OFF TOPIC
2. personal attack upon the Chair
3. Duplicate post in an attempt to circumvent the rules of A Small Voice Board.
Of course I will defer to your position as Chair for final disposition.
David Weed
aka the Bird of Prey
www.warp-drive.com
Though not, perhaps, pointed in the direction you intended.
Don't you go pointing that sharp stick at me!
Sam
IHUB = Immediately Humble Unto Bob
I know I have been silent for some time but there is a reason. When I first heard SI Bob was coming to IHUB I became concerned especially for the peace and tranquillity and knowing the only thing left on SI were the stalking off-topic bullies that are dismay and confusion and merely hit generators. My opinion as a small voice in cyberspace is to question that which I believe is harmful to the people. Thus this composition is based on the scar from the character assassination carried out with extreme prejudice on SI since 1998 under the bias administration that allowed such nonsense to carry on. IHUB was originally a vision for people to escape the turmoil and havoc of SI and Raging Bull thus I rip down my sleeve and show the branding of the cyber-numeral 8 on my right shoulder and invoke Law 7. IHUB should be returned to the people.
As through our history destructive forces have arisen to pursue total world domination. It is the quest of every evil egomaniac from Hitler and his holocaust to the sick cartoon character Stewie Griffin. Where Stewie is a one-year-old little boy of truest evil, Hilter and others grew their armies. The bottom line and primary goal today is to control and completely dominate over all Cyber-Mankind. Until this objective comes to fruition, anyone or anything that interferes with the grand plan shall be destroyed.
In 1997 an atomic bomb dropped on the stock market and thus a new era of information exploded. As in the movie “The Postman” a New World order would arise out of this lawless Chaos like the Xerox Salesman who gains total control and becomes the law of the land. Intelligent people have asked and wondered who would arise out of the mysterious darkness of Cyberspace to be the self-appointment supreme Emperor of the Cyber-Cosmos that would have the army (cronies) to subjugate all who dare to oppose this newest deus with egotistical real-life illusions of Granduer?
The war for total domination of Cyber-World has been raging for since 1997 as documented in John Emshwiller’s book, “Scam Dogs and Momo Mamas.” Within this simply written publication John Emshwiller articulately conveys and documents the controversial battles for power, influence and control of Cyber-Turf. Is this a classic and prelude basically of events to come as the book shows the self-appointed emperors along with their rises and falls.
Lets face it, the bottom line to a chat site is advertising dollars. The more hits you have the more the site can make claim to fame. It does not matter about the topic or the quality of content, it only matters about hits. Thus comes the controversy factor, which basically is designed for the more the merrier. Truth, facts and fair play does not matter. The verbal warfare is what is needed so the hits can escalate. Thus a site only needs an army of renegade posters to secure their market share such as: harassing stalkers, relentless bashers, urban legend generators, whiners, libelous innuendo experts, unlawful insinuations, abusive rhetorical manipulators, invasive privacy revealers, tortuous spin doctors, and there are more. Having an army of these types taking advantage of total unchecked disruption can easily increase the hit count to a site. What is lost is the quality.
This is compounded and can get totally out of control by a peacemaker with the opinion and power to enforce it like bad mouthing a stock all you want. Negative opinions are just as appropriate as positive ones and truth is not the issue. The excuse is simply refute the and refute it over and over and over again until it becomes urban legend and the truth will be off topic. This creates activity, traffic and most of all hits. However, one shroud is to limit the defense so the attack can get out of control. The defender can only post a limited amount but the gang of disrupters can overwhelm the thread or visa versa so the hit count escalates but does not allow equal time for the defense or offense.
But this type of distressing attacks and disruption weights on people. After a while decent people eventually take enough of it and leave after exhaustingly seeking relief of some nature from the peace-keepers. Thus losing the main posters and their following the site will die as in the fate of Silicon Investor (SI). Realizing that people had had enough and searching for a safe haven, IHUB recruited key people to test the beta site. Investors HUB (IHUB) became such a sanctuary for those that were tired of the nonsense. People wanted to return to the principals of IRC and the features of SI. To answer this outcry of the people, the concept was a Chairman of the thread that would have the power to keep order. As the site grew, a solid reputation began to grow as each community had its own leadership thus peace and tranquillity became the underlying basis for sharing information. Soon little communities sprout up as they try to keep the focus on information. The people had their sanctuary.
Invaders of nonsense were dealt with swiftly by the Chairmen. Bashers, spin-doctors, FUD (Fear, Uncertainty and Doubt) fabricators plus other attackers were not allowed to spew nonsense without an underlying basis. Multiple aliases were swiftly exposed and IHUB began to demonstrate that it was not the hits but the quality of information that was first and foremost. IHUB was becoming the people’s choice. The downfall of SI is a prime example of not addressing these situations. Even though the character assassinations and personal attacks was mainly responsible for getting SI’s hit ratio up, it was the lack of implementing TOS and then doing it only selectively that became the waterloo for SI. In the end, SI was doomed because these relentlessly stalking cronies that do not share stock information nor provide due diligence nor any other type investment rhetoric or research, other than blaming the Internet posters for failures of companies were in full control. They are/were there to generate trouble and thus destroyed SI.
In March 2001, the controversies on SI were no longer a problem and the hit ratio was destroyed. Basically, people were fed up and had moved away from the heckling and ridiculous lack of or rather bias administration TOS procedures. Of course a lot of white washing was spun to account for the exodus from SI. However, the army of hit creators only had themselves to post to in the end and thus SI cut back on the peace-keepers. Instead of keeping peace and dealing with these hit creators SI found itself alone for the crowd simply went elsewhere. No more need for a peacekeeper.
Again, IHUB was an alternative from the bashers, stalkers, bullies, urban legend generators, character assassinations and total pandemonium architects. As the Internet posters searched for a site where some control to these evil hit creators could be found, such a place most felt would be IHUB. But alas a sad day for the people came when the main controlling force and adminstrative icon of SI came to IHUB and the SI hit creator cronies followed to now conquered IHUB. With SI laying raped and stripped clean on a bloody battlefield in the after math of hit creators thus a new campaign motto echoes through the endless void of cyberspace. Immediately Humble Unto Bob! (IHUB)
As I watch this newest regime invade and establish its new laws and power over the site, I am reminded again of the Postman. As Bob the computer salesman flexes his muscles and totally appears to be undermining the original concept and promises that were used to get pioneers to the site to establish small communities, I envision the invasion of the small communities by Bethlehem the Xerox salesman. The pushing and bullying of people now suddenly disrupts the once peaceful community. The good guys attempting to defend the onslaught of the new invading cronies of hit creators are eventually dealt with by a swift sword and punishment for daring to defend one’s self and maintain the integrity of the site. Thus the new regime flexes its muscles.
Watching Francios, one of the original recruited Chairman stand up for what he believe to be forthright and did not humble unto Bob, was then strung up as General Bethlehem did one prisoner in one scene. There Bethlem read the "Laws of Eight" but the comparison is quite unique as Francois met with the terminating sword of Bob:
“The Postman” “Laws of Eight”
1. You will obey orders without question.
2. Punishment shall be swift.
3. Mercy is for the weak.
4. Terror will defeat reason.
5. Your allegiance is to the clan.
6. Justice can be dictated.
7. Any Clansman may challenge for leadership of the Clan.
8. There is only one penalty - DEATH
Could it be this same “Laws of Eight” have now come into existence on IHUB with the new regime of “Bob’s World?” Immediately Humbled Unto Bob or face the “Laws of Eight”
1. You will obey Bob’s orders without question.
2. Punishment shall be swift.
3. Mercy is for the weak.
4. Terror will defeat reason. (cronies will handle this)
5. Your allegiance is to BOB!
6. Justice can be dictated. (Bias Administration Practices)
7. NO ONE may challenge for leadership, influence or turf in Bob’s World
8. There is only one penalty – TERMINATION
When I confronted Bob, I made a statement to see if I could get a confirmation, “that let the evil do whatever they want and the good guys when they complain get nailed.
Welcome to Bob;s world.”
In his arrogant style Bob replies, “Actually, the last part of that is more accurate than you intended.” Thus the confirmation that IHUB is basically now “Bob’s World.” He continues with his reasoning for the first part as “The fact that someone says another is evil and wrong doesn't necessarily make it so, in my experience.” Thus the cronies reign on and create hits since evil cannot be defined and thus the battlefield for control is now established.
Also the reasoning that was read to Francois before Bob’s sword terminated Francios’ existence was only 6 of the “Laws of 8” or was it.
Effective immediately, your account on Investors Hub is terminated. The reasons for this action are:
1. Continued abuse of the CoB feature. This is a violation of Law 6 the Justice can be dictated. Fighting the cronies of disruption and there relentless attacks, spins, personal attacks and even posting his private accounts from SI and RB very slyly only caused the defense to become emotion enough to sign his own death warrant in accordance with Law 6. Of course the cronies are left to rain terror on the next target as Law 8 is executed by Bob on the target.
2. Continued personal attacks on me despite my very clear warnings against it. A clear and distinct violation of Law 5 to have total allegiance is to BOB! Also a violation to Law 7 because Francois dared to expose the bias tactics of Bob!
3. The almost exclusively destructive nature of your participation since reinstatement from your previous suspension. Direct Violation to Law 1 for not being totally obedient and Immediately Humbling Unto Bob! Which invoked Law 2 & 3 where punishment was swift and no mercy thus establishing the invoking of Law 6 because Law 4 was strategically used to get the advantage over Francois. But also Law 7 for daring to contest Bob’s reign of bias and unfair administrative practices Law 6 thus resulting in Law 8.
4. Overall conduct very unbefitting a Chairperson on the site, including personal attacks on me and others.
Again by allowing the situation to get him justly emotional this caused a direct violation of numerous Laws and now suddenly there is a befitting conduct Laws. I guess the Laws of engagement change also, of which neither have been published or made know to anyone. But by defending against the cronies and not allowing their hit creating disruption to fester, Francios’ conduct is now selectively being use as an excuse to exercise Law 8. Where maybe a suspension would calm him down. Regardless of fairness, this sudden conduct law establishes the underlying basis that there are no Chairmen anymore only the KING CHAIRMAN BOB! Thus Law 7 is violated and Law 8 executed.
5. Continuing the "Bash Bob" theme on the Q&A thread despite very clear warnings to everyone in general and you specifically. Violation of Law 1 & 5 though nothing was done to stop the same on Francois or the off topic attacks by the hit creating cronies.
6. Continued harassment of me personally. Again Law 1 and 5 caused the effective judgment and execution of of Law 8. But for anyone but Bob this has to be endured under normal chat sites, which is one main benefit that IHUB allowed.
Now with Francois dead, the cronies can now regroup and seek out for another target to gain control of Cyber-World as the bias tactics continues using the historical tactics of SI. Thus absolute chaos has come to IHUB and makes you wonder if IHUB knew the turmoil and how the site would change under this newest regime and thus the creation of Bob’s World and the “Laws of 8.” The influx of the hit creating cronies that only cause total disarray, dismay and harassment that have gone unchallenged until the target is eventually executed under law 8, has floursihed SI and now follow to invade IHUB to reek havoc.
The once peaceful society and unique concept appear to have been totally undermined and IHUB over night has transformed into the perils of SI, which caused people to leave. SI is a desert in Cyber-World and the once fruitful and growing society of IHUB is being overrun with bullies gaining control. Harmony has been replaced with CHAOS. Facts and solid information is being reciprocated with attacks, innuendo, insinuation, fabrication and attacks.
As I became furious over the frame and demise that was so well planned against Francios, I like “The Postman” entered the battlefield challenging the unfair and bias tactics that lead to the malicious execution of Francios. Just like in “The Postman” I shouted who I was and I claimed Law 7 to challenge this newest world dominance takeover of justice being dictated and reason replace with terror. Just like General Bethlehem, Bob merely conveyed the classic, “HUH?” He forgets the scars I wear from the turmoil and character assassination that he allowed through bias administration practices on my attackers, not to mention others who suffered from the same bias practices. However, Jill was the only relief I recieved.
He forgets his blatant tactics of logic and bias ideas that cause people so much grief and eventual escaped seeking an alternative site thus leaving SI. He forgets the entire harm he festered and allowed so the cronies could gain full control without ramifications for stalking, personal attacks, posting off topic, innuendoes, etc. He forgets that SI grew in posts because of the dismay and personal attacks for control of Cyber-World under his regime that ran off everyone good and only the cronies were left to fight among themselves. He forgets that people when they have been wronged do not forget those that had the power to stop every violation of TOS never once even justified any corrective action.
But the victims and their cyber-scars do remember the suspensions for defending and the cyber-scars of the attacks and the hours of defending. Guilty until proven innocent reign supreme and even then once proven innocent, the cronies are allowed to continue the urban legend attacks unchecked. This unchecking caused the stock talk sites to become personal attack boards not about the stock anymore except for the initial attack on the company, which later spread to a character assassination of a long. Thus the threads of SI were about attacking individuals and the defense or refuting, which eventually created mayhem but the hit count was effectively stimulated.
I learnt a few things in declaring war on this new regime. There are no Chairmen only pawns to a DICTATOR, an ultimate unchecked power and by his standards whatever they are and can change as needed, he can use “Befitting Conduct” so the cronies can fester and gain absolute control. Also if anyone dares to challenge this new regime then your right to post will be limited and thus the bottom line is to eventually silence you and if you do not go silent thus execution of Law 8. This is “Bob’s World” and you will humble unto him or face Law 8.
It is a sad day when Matt with a truly heartfelt for posters looking to escape the misery that most faced on SI has now only undone the very concept and thus Immediately Humbling Unto Bob has undermined the entire concept and purpose of his vision. As the mayhem festers, Matt has to realize he has a major problem or maybe hits is all that is important and not the quality and tranquillity of the site with the chairman concept totally undermined.
What was once a free and objective site is now the haven for the lifeless hit generating cronies and unlike “The Postman” this newest regime is getting paid. Wonder how many hits and Law 8s will be executed, as with all total world domination scenarios, before “Bob’s World” returns back to the original concept and to the people. People came here originally to escape that which has now followed the logic, arrogance and bias practices of the new administration.
I call it as I see it and Francios should have gotten a suspension at worse case but not termination. I feel Bob has no right to undermine the original concept and this is not Bob’s world. IHUB for made as a successful alternative to other sites for the people. Let’s hope that it returns to the people soon and this is merely and over dramatization.
:=) Gary Swancey
Uh Oh looks like Paid Bashing is real!
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=15699947
:=) Gary Swancey
Contracted Independent Investor Relations for
CBQI & DTGI, compensated a monthly cash fee
http://www.marketex.net/compensate.htm
Gary, look what I found!
The Series F Convertible Preferred Stock
On January 27, 2000, the Series F Preferred Stock Certificate of
Designations was amended to obligate the company to issue up to seventy-seven
million shares of its common stock upon the conversion of the 12,500 designated
shares of Series F Preferred Stock, as noted above. Such increase in the number
of shares of common stock was made in the interest of investor relations of the
company.
Under the terms of the Series F Subscription Agreement entered into August
10, 1999 that the company would be required to make certain payments in the
event of its failure to effect conversion in a timely manner. In connection with
the Series F Preferred Stock, the company would be obligated to redeem the
excess of the stated value over the amount permitted to be converted into common
stock. Such additional amounts would be treated as obligations of the company.
At various dates through December 31, 2000 the other 7,526 shares of Series F
Preferred Stock have been converted into 48,776,638 shares of the company's
common stock. Presently, there are no shares of Series F Preferred Stock
outstanding.
And there are more! Although it appears the conversions have been done for some serious cash. $2 million converted to $6.6 at todays stock price close,in only monthsNow I am evaluating if the worst is behind....one's still on books have a .12 bottom, and there are some other good things in todays filing. This friggen #@$&*#@. Another gd cd problem.
These instraments ought to be illegal. And another thing....it would seam to me the returns on those debenture mutual funds should be much higher. Am I missing something....or will they be showing some tidy returns the next 6 months.
That is a spin of Mary Ellen Joseph's poem that is suppose to end with ... means Believing in yourself...
http://www.bluemountain.com/winners/index2.html
She won second place of the Second Tri-Annual Blue Mountain Arts Poetry Contest, I believe in 1997.
I hate when authors are not recognized.
:=) Gary Swancey
Contracted Independent Investor Relations for
CBQI & DTGI, compensated a monthly cash fee
http://www.marketex.net/compensate.htm
“Standing For What You Believe In”
Standing for what you believe in,
Regardless of the odds against you,
And the pressure that tears at your resistance,
…means courage
Keeping a smile on your face,
When inside you feel like dying,
For the sake of supporting others,
…means strength
Stopping at nothing,
And doing what’s in your heart,
You know is right,
…means determination
Doing more than is expected,
To make another’s life a little more bearable,
Without uttering a single complaint,
…means compassion
Helping a friend in need,
No matter the time or effort,
To the best of your ability,
…means loyalty
Giving more than you have,
And expecting nothing
But nothing in return,
…means selflessness
Holding your head high,
And being the best you know you can be
When life seems to fall apart at your feet,
Facing each difficulty with the confidence
That will bring you better tomorrow’s,
And never giving up,
…means confidence.
Author Unknown
Save them, they are worth $8.00 each...and by the way, short any stock trading higher than 3x book if you can, otherwise save your spare change, in DC we are buying pennies from homeless people through the volunteers retained by our non profit Free and Clear Foundations for $1.00 each, right in front of the Federal Reserve Bank Headquarters and across from the Treasury building near the White House...stay tuned as the dollar soars, and another 5 trillion get's swiped into thin air from the NYSE (current market cap 18.5 trillion), and more South American countries currencies collapse and adopt the dollar as their standard of value....Three cheers for the Penny King!!!!
Founder: The Free and Clear Foundations of Earth, Chairman & CEO Penny King Productions, The Free and Clear Bancorporation, Senior Trustee; The Free and Clear Fund. www.iexchange.com top analyst!
Some Thoughts on Due Diligence (DD)
"What some consider DD and what I consider DD are worlds apart..."
So What is Due Diligence?
This question is often unanswered or worse misanswered. Many "investors" consider the latest 'hot tip' to be sufficient DD. I don't. Even if I choose to evaluate a 'hot tip', most never get past my Technical Screening process. Those that do get to pass the following rigorous gauntlet. Why so difficult? I wish to avoid actually having to visit the company! But that is another tale altogether.
This is my idea of DD:
1. Gather all contact information available.
2. Read the Filings. Perform Fundamental Analysis.
3. Contact IR to verify steps 1 & 2.
4. Read the Filings.
5. Review independent sources for ratings or opinion.
6. Read the Filings.
7. Review trading logs.
8. Read the Filings.
9. Judge Public Sentiment.
10. Read the Filings.
11. Review Technical Analysis on non OTC issues.
12. Read the Filings.
13. Review Fundamental Analysis.
14. Read the Filings.
And last but not least
READ THE FILINGS!!!
What do you ask the IR?
Since step one involves gathering contact info most opening questions will involve verifying that information (ie Transfer Agent). This lets the IR know you are serious and have done your homework.
If you have read the filings you can and should ask the status of any financing agreements and or recent announcements (PR's) that are relevant. In the case of a PR that says something will happen by x date, you can ask if date was met, and if not why not. Don't be confrontational just ask about status.
How you do things will have a great impact on the response from IR. Deliver questions straightforward and forthright. Don't try to cover too many topics at once. When you hammer an IR they tend to defer their answers. Nobody likes to get the third degree.
The biggest thing to remember is that this conversation should take place BEFORE you buy the stock and AFTER you've read everything available about the stock. As you read there will be questions that arise. Some will be answered by further reading, only the few that remain after your research will require an email or phone call.
Do IR's Lie?
A good IR won't lie because that breaks the distinction between an IR and a PR. Listen for hyperbole. A good IR will remind you of Joe Friday on Dragnet...just the facts. Too much enthusiasm may indicate that you should place your investment elsewhere.
My DD will usually begin with 25 issues or so. By the time I'm done with steps one and two it's usually down to 3-5. More often than not I delay contacting IR until the last step. That way I don't have to write more than one or two.
Good DD doesn't happen by accident. It also doesn't eliminate losses. But it can go a long way to reduce the frequency of losing.
Good luck to all!
David Weed
aka the Bird of Prey
www.warp-drive.com
Another good article Gary! eom.
b/r Arch
Save Our Stock
http://www.forbes.com/forbes/2001/0219/113.html;$sessionid$HJCXREAAAAF4XQFIAGWCFFA
Chana R. Schoenberger, Forbes Magazine, 02.19.01
Is there some flaky concept stock that you would like to sell short? Be forewarned: You could get caught in a short squeeze. Companies that don't like short-sellers are rounding up loyal shareholders in schemes that choke off the air supply of the shorts.
It's all perfectly legal—and maybe even fair. After all, bears gang up against companies they have shorted by spreading tales of financial distress. Bulls gang up by removing their shares from borrowable status. That shrinks the supply of shortable stock. When a squeeze like this works, the shorts must scramble for cover, buying back their borrowed shares at ever- higher prices.
Squeezing shares appears to have worked for small Storage Computer (amex: SOS - news - people), a Nashua, N.H. servermaker (market cap: $135 million) trading under the unfortunate ticker symbol SOS. The stock rocketed from 75 cents in October 1999 to $24 in November 2000. Then came a bear raid that knocked 71% off its value. Chairman Theodore Goodlander's response: a Dec. 20 letter to shareholders begging for help against the shorts. The price has since doubled to $9.
How does a loyal shareholder help squeeze the enemy? By putting what is called a "no borrowing legend" on the shares. Often this takes the form of moving shares from a margin account, where, under a typical brokerage contract, the broker can freely lend them, to a cash account. If need be, the shareholder can pull shares out of the stock-loan system by taking delivery of a certificate.
Short squeezes can work for large companies, too. In July Irwin Jacobs, a Minneapolis financier who owns 5% of troubled insurer Conseco, independently waged his own campaign against shorts. He spent $400,000 for full-page ads in the New York Times and Wall Street Journal, calling on fellow shareholders to take their shares "in-house." "It was incredibly successful," says Jacobs of his ad barrage, which he credits with helping Conseco's price to double since.
How does all this go on? Remember how shorting works. The short-seller borrows stock from a brokerage firm, which in turn borrows the shares from a customer with a long position. The short-seller sells the borrowed shares in the open market. Someday he must buy back that number of shares in the open market. If he is able to do so at a lower price, he has made a profit.
The broker can make good money from this activity. The customer whose idle shares were used in the transaction gets no compensation. The broker pockets interest income, around 6%, from the proceeds of the short sale, passing along only a portion of it to the short-seller (or none, if the short-seller lacks clout). Worse, if the stock is hard to find, the short-seller may even have to pay a borrowing fee of up to 1.5%.
Over time many companies have won important, if temporary, victories against the shorts by getting their fans to grab back shares. Presstek, which was working on a supposedly revolutionary printing system (FORBES, June 17, 1996), is one. The stock rocketed to $190 although the shorts insisted that it wasn't worth anything at all. Presstek is down to $11 now, but it is likely that more than a few shorts were forced to cover at a loss long before their viewpoint was vindicated.
Don't expect the shorts to give up, though. Their case against Storage Computer remains intact: Goodlander admits it has a negligible market share in an industry dominated by giants like IBM and EMC. And it has lost money for the last three years. Northland Cranberries tried to freeze out the shorts in 1997, but too few investors went along with its plea. That stock, $17 in August 1997, now goes for just over $1.
:=) Gary Swancey
Contracted Independent Investor Relations for
CBQI & DTGI, compensated a monthly cash fee
http://www.marketex.net/compensate.htm
Scammers & Spammers
Do Scammers and Spammers share more than seven common letters?
Having discussed (and often cussed) the tactics of investment message board scammers for some time, and having been following the spam issue almost since it's inception, I have spotted some similarities in the methods of scam artists and the methods of spammers.
One of the first things you might notice is the attempt to hide behind false identities. Both parties wish to hide their true names in order to avoid the ramifications of their actions, some of which though not illegal are certainly very likely to invoke a negative response. As a result both scammers and spammers require the same investigative tools to ferret them out.
If you never go hunting one of these types you'll never see one of the most interesting correlation's between them. They tend to nest. What I mean by that is, you will often find more than one scammer and/or spammer operating from the same building. Sometimes they even use the same office connection.
If you think about it, this is logical. Both scammers and spammers have similar goals. Namely to influence as many as possible to do (or not do) something. They also need to remain anonymous to the masses lest they damage their credibility. Some might say that so many folks know what spam is and delete it that it doesn't work anymore. Credibility isn't an issue. Until you consider the number of newbies coming to the Internet every day, and that even a .5% response on a 10 or 20 million send email will generate more than enough to cover the cost to send. Why else would they keep doing it?
I'll grant you that a stock scam on a message board is more work than sending 20 million emails. But is apparently just as effective. One need only to look at the number of multiple aliases on a single message board to see that this type of scam is quite popular today. Given the difficulty of tracking these folks and the lack of cooperation from the MB services, it seems unlikely that things will get better before they get worse.
One interesting possibility that we may discover is how many times the scammers and the spammers are one in the same.
As always, keep your eyes and ears open. You never know what you'll find!
David Weed
aka the Bird of Prey
www.warp-drive.com
Matt, wouldn't that be a great way to see how many people read certain threads and who they are?
Never saw that before on RB either, however just today I noticed someone posted a "ignore this poster" link at..........
http://ragingbull.lycos.com/mboard/boards.cgi?board=RELIG&read=36880
The poster that was linked to ignore was named OhMy_Uintah
The RB poster that posted the ignore link was "tool0006" and began posting today. He only posted to two threads and those were two threads of us RB newcomers. I'm too tired to connect the dots on this riddle.
A brand new form of manipulation!
Clicking on the link in this post automatically membermarks this person.
http://ragingbull.lycos.com/mboard/boards.cgi?board=NCTI&read=59797
In addition to the membermark manipulation, I wonder if there are any other agendas to this situation. Is there a way someone can monitor how many membermarks they get on the RB boards, and thus get a reading of how many people are watching but not posting in a particular time frame/
Any ideas?
Never seen this one before.
Here's a WHOPPER!
Gonna get interesting.
http://www.sec.gov/news/headlines/internet5.htm
Imagine busy to the tenth power. I have hardly had time to read much less post. Things are really taking off.
later
David Weed
aka the Bird of Prey
www.warp-drive.com
This was posted over on RB in the AVBC thread by Buckwheat131.
I thought it merited inclusion here.
A little primer on convertibles and how companies and regulators are dealing manipulation:
http://www.sfglaw.com/html/junk_equity.html
JUNK EQUITY DEALS CAN HARM STOCK
While a "floorless convertible" offering can help a struggling company, the floating conversion feature is potentially ruinous.
By Robert C. Friese and Jahan P. Raissi
as published in The National Law Journal, February 15, 1999
In the 1980s, troubled companies often turned to junk bonds as a source of last-resort financing. More recently, small, struggling public companies that cannot raise capital through traditional means have turned to a relatively new type of security, which, depending on one's point of view, has been called a "floorless convertible," "toxic convertible," "death spiral convertible" or simply "junk equity." Although these securities can be a boon to a struggling company, they can also be the final nail in its coffin if not structured properly.
Abuses of these securities are causing substantial losses to the investing public and great harm to many companies that rely on them for financing.
Although the possible permutations are many, floorless convertibles typically take the form of privately place preferred equity or debentures that are convertible to common stock after a fixed period of time. The conversion price is generally discounted 15% to 30% from the market price of the common stock at the time of conversion.
What distinguishes these securities is that the conversion ratio is tied to, and varies with, the market price of the underlying common stock --- hence the name "floorless" convertibles. The lower the market price of the common stock at conversion, the greater the number of common shares the company must issue to holders of the floorless convertibles.
Like many other seemingly good ideas that often don't work in practice, the concept of floorless convertibles is theoretically sound. Given honest, nonmanipulative market activity in the underlying common stock, when properly structured the capital raised in an offering of floorless convertibles can allow a struggling company to realize greater shareholder value.
Unfortunately, the history of these offerings has shown that the results are often ruinous for companies and their shareholders. This has become a serious problem since this type of security has grown to an annual billion-dollar-plus cottage industry for certain of its promoters.
The source of most of the recent problems with floorless convertibles has been the floating conversion feature. If the market price of an issuer's common stock declines, the floating conversion feature can result in an unexpectedly large number of common shares being issued at conversion.
The release of large quantities of common stock into the market can significantly depress the market price of the common stock and can necessitate an even greater issuance of common stock in subsequent conversions. This phenomenon can create a downward spiral in the market price of the common stock as greater numbers of shares are sold into the public market.
Moreover, the issuance of large blocks of new common stock severely dilutes existing shareholders. The floating conversion feature also provides the unscrupulous with an incentive to depress the market price of the company's common stock.
Even for legitimate investors, there is an incentive to try to lock in profit by selling the issuer's common stock short, covering with shares obtained in the conversion. Often, the cumulative effect of market manipulation, short-selling and the food of common stock onto the market has been to put a company and its stock into the "death spiral."
High-Tech Targets
Some companies in the high-technology sector recently have been using floorless convertibles. Shares of these companies often are thinly traded, making them especially susceptible to price drops when the converted shares reach the market or when they are faced with sustained short sales.
Though floorless convertibles can be used by seasoned companies in turnaround situations as well as by new companies, the common denominator in such offerings is the issuer's lack of a source of conventional financing. Without the ability to tap into traditional debt or equity funding, issuers resort to floorless convertible offerings and often have little bargaining strength to avoid or blunt some of their more dangerous features.
The appeal of these instruments to their purchasers is easy to understand. The floating conversion ration and discount to market provide protection against a drop in the price of the common stock and usually all by assure the holders a profit.
To try to lock in a profit, the holders of the floorless convertibles sometimes will sell the issuer's common stock short and, thereafter, will cover with the converted common stock.
Alternatively, a holder may simply convert in to common stock at a discount to market and sell the stock to public investors, often pursuant to a registration statement on Form S-3, at a guaranteed profit. An emerging body of largely professional investors actively solicits companies for this type of private placement.
The Threat of Manipulation
Floorless convertibles pose serious dangers for issuers, even when the securities are held by legitimate investors. In the wrong hands, floorless convertibles are a stock manipulator's dream. If the holder of a floorless convertible sells the common stock of the issuer short, the market price of the security is driven lower and, at conversion, it will provide the holder with more common shares. The holder can use the shares received in the conversion to cover its short position and still may have shares to sell in the open market.
Sales in the open market may further depress the market price and increase the number of common shares received in subsequent conversions. The further the market price of the common stock declines, or can be driven down, the greater the profit.
In some cases, the manipulation of the issuer's common stock is overt. Traders have observed large buy orders immediately countered with several sell orders at prices below the immediately preceding buy order.
"Marking the close" – in which sell orders are place at the close of the market to create a downtick and a bearish impression – is one technique that has been used. Another technique involves massive short sales in situations in which almost no shares are available for borrowing, suggesting manipulative "naked" short selling.
In some of the most extreme instances, share prices of companies issuing such convertibles have been driven down by more than 90% for brief periods. On the heels of these price collapses, companies are presented with notices of conversion.
As the market price of the issuer's stock collapses, existing shareholders are hit with the one-two punch of a downward spiraling stock price and large-scale dilution of their holdings. Issuing companies sometimes face the delisting of their shares, permanently damaged capital structures and an inability to raise additional financing.
This turn of events can occur even in the absence of overt market manipulation. This flows from the holder's ability to lock in a profit by selling the issuer's common stock short and covering the position with shares obtained in the conversion.
In addition, professional short-sellers have caught on to the fact that the price of shares of companies that resort to floorless convertible financing will usually fall, and they seek out such companies as short-selling opportunities. Holders of floorless convertibles and market makers or others willing to short the stock sometimes enter into stock-loan arrangements, allowing the prospective short-sellers to borrow the stock needed for short sales.
Theoretical Limit
The shorting of shares is not illegal, but when done with manipulative intent or by brokerage firms or individuals without the ability to deliver the underlying common shares, shorting can become illegal and manipulative. The theoretical limit on such manipulation should be the "borrowability" of the issuer's shares, which is often nonexistent in thinly traded stocks, even from brokerage firms with large "short boxes."
Yet the fact that there may be no shares available to borrow does not seem to have limited the sort of shorting activity that has driven down the shares of many companies relying on this financing vehicle. This raises obvious questions of manipulation and enforcement of what are primarily self-regulatory organization (SRO) rules limiting most naked short-selling.
Regulatory Agencies
Securities regulators are beginning to pay closer attention to these instruments. The concern of the National Association of Securities Dealers (NASD) has been reported in recent months. The responses under consideration by the NASD run from informational campaigns to rules limiting the dilution of existing shareholders.
On Jan. 21, the NASD issued an interpretive release explaining the application of existing NASD rules to an offering of floorless convertibles by Nasdaq-listed issuers. The NASD release identified six NASD rules and categories of rules that may be implicated in such an offering: the shareholder approval rules, the voting rights rules, the bid price requirement, the listing of additional shares rules, the change in control rules and the discretionary authority rules.
Perhaps the most significant of the interpretations concerns the shareholder approval rules. Under certain circumstances, these rules require shareholder approval before the issue of common stock, or securities convertible to common stock, equal to 20% or more of the common stock outstanding before the issuance.
The release explains that, in applying the shareholder-approval rules, the NASD staff will look to the maximum number of common shares that could potentially be issued to determine whether the 20% threshold has been met. Thus, regardless of what is likely or anticipated, if, theoretically, the floorless convertibles could be converted into an amount of common stock equal to or greater than 20% of the outstanding common stock at the time the convertibles are issued, ****shareholder approval will be required before the floorless convertibles can be issued****.
Similarly, both the Division of Corporation Finance and the Division of Enforcement of the Securities and Exchange Commission have been watching the developments surrounding floorless convertibles. The Division of Enforcement is investigating a number of floorless convertible offerings and the subsequent conversions and activity in the underlying common stock, some of which involve potential manipulative activity by entities and individuals abroad.
Issuers' Concerns
From an issuer's point of view, the regulatory concerns connected with an offering of floorless convertibles center chiefly on the private placement of the convertibles, the registration and resale of the common stock after conversion and the disclosure obligations arising from the offerings.
For investors, increased regulatory scrutiny is raising concerns. Litigation by shareholders is also on the increase. Although this may seem to be a logical area for shareholder litigation against alleged stock manipulators, manipulation cases are hard to prove and, to date, have not brought the plaintiffs' securities bar into action in a meaningful way.
One theory included in some cases brought recently asserts liability for short-swing profits under § 16(b) of the Securities Exchange Act of 1934. A sometimes-overlooked consequence of the floating conversion feature is that, if the price of the common stock falls far enough and the number of shares received in a conversion balloons, the holder may unexpectedly become subject to the short-swing profit provisions of § 16 and the reporting requirement of § 13.
Several disputes have arisen between issuers and the holders of the convertible securities. Faced with the prospect of extreme dilution of existing shareholders or of making a substantial cash payment when such cash may be unavailable, some issuers have simply refused to convert the preferred shares or to bring effective the registration of the underlying common shares.
Although this may give rise to possible contract-based claims by the holders of the securities, the few courts that have dealt with the issue have not been consistent in their responses. The responses have been largely driven by the specific facts, but the alternatives seem to be to uphold and enforce the literal reading of the certificate of designation, or to deny mandatory injunctive relief to the holder of the convertibles (based on availability of the legal remedy of damages or ambiguity in contract language).
Litigation commenced by the holders of floorless convertibles to compel conversion has met with accusations from the issuing companies alleging manipulation and bad faith on the part of the holders. Some issuers also have filed suits alleging manipulation against holders of floorless convertibles to prevent conversion.
It is too early to tell whether the volume of litigation will grow or what judicially created rules will emerge from these cases. On the one hand, the holders of the securities have a fairly straightforward contract claim for conversion and registration of the common shares. On the other hand, an issuer that can demonstrate manipulative activity or other illegal activity on the part of the holders of these securities should fare well in halting or limiting a conversion or registration. The few cases that have surfaced to date have either settled or remain unresolved on the merits.
What Should Be Done?
With at least hundreds of these offerings taking place – and apparently more than a billion dollars being raised annually – it would seem that some regulatory or legislative restrictions are needed. The NASD's recent interpretive release is a step in the right direction, but it is too early to gauge what impact it may have. In the meantime, the harm that can be done invites aggressive enforcement of the anti-fraud and anti-manipulation provisions of the federal securities laws and SRO rules.
Given the evidentiary difficulties a manipulation case presents and the absence of a private right of action for aiding and abetting since the Central Bank case, and because some of the questionable conduct occurs through brokerage firms and other regulated entities, the most effective enforcement mechanisms probably rest with the SEC and SROs. To date, no enforcement actions have surfaced, and none of the market participants who profit from these securities has stepped forward to help limit the abuses connected with these offerings.
Issuers' Awareness
In the interim, the best precautions against the harmful aspects of floorless convertible securities lies in the awareness on the part of the issuers and their counsel of where the danger lie. In general, if these securities can be avoided, they should be.
If such an offering is the only alternative, issuers should use contractual restrictions to mitigate the potential hazards of these securities. For example, the floorless convertible holder's ability to sell short or to enter stock-loan arrangements should be carefully and tightly restricted – and probably prohibited altogether, if possible.
In addition, negotiating a minimum holding period before the common shares may be registered and resold is useful, as is restricting the right to convert (or the number of shares that may be converted) if the stock price drops below a certain point. A floor on the number of shares obtainable in a conversion, or a manageable cash payout alternative to a stock conversion, may also be useful to limit the harm these instruments can cause.
Finally, issuers need to perform the due diligence necessary to ascertain what type of investors they are dealing with before issuing these securities, including pursuing references to their experience (and that of the issuers) in such prior investments.
Beyond contractual provisions, the issuer may sometimes have the ability to deny the right to convert or to defer registration of the underlying common shares. Although both alternatives present obvious litigation risks, ****the obligation of the issuer to disclose fully all material facts before bringing a registration statement effective may justify deferring conversion,***** registration or both, especially when manipulative activity appears to be having a substantial impact on the issuer's common stock and, perhaps, on the company's listing status and ability to survive.
The floorless convertible security may in some instances be the only way a company can continue in business, and under such circumstances it may protect existing shareholders from a substantial or total loss of their investments. Thus, as a financing tool, this instrument has potential value and utility to some companies and their shareholders.
When investors in floorless convertibles are essentially guaranteed a profit, however, it has usually meant that existing shareholders pay the price through massive dilution and a collapsed stock price.
Unless and until tighter rules are in place, the only recourse for companies in need of such financing will be to understand thoroughly what they are getting into and to negotiate contractual provisions sufficient to blunt some of the more harmful features of these securities.
This article is reprinted with permission from the February 15, 1999 edition of The National Law Journal. © 1999 NLP IP Company.
Law News Network website at http://www.lawnewsnetwork.com.
David Weed
aka the Bird of Prey
www.warp-drive.com
Very quiet over here lately!
What gives?
Oh yeah I remember that well. I also have such a distinct sytle and purposely designed rhetorical signatures that if I do try to create another alias .. BOOM I will be disocvered in minutes, esppecially by the numerous exposures I have done and those out for vengeance.
Now why do I have these signatures it is to discover deception. Say someone tries to copycat a rhetorical signature in a character assassination or creation of an Urban Legend or better tries to claim one of my compositions as thei own which I have nailed a few on. But the bottomline is in the normal debating on line certain words are as part of someone's rhetoric as their finger prints. For example: Toute' is mine and I have searched on it and it comes right back to me.
I have others too ...
Take pinging, fingering, rhetorical signatures, and a lot more you can clearly see who is who ... You know that from another stock.
Yes My wife who does not post has a computer so she can converse with her family. many families do have more than one computer. Those that do not it is easier to spot. Heck even the Yahoo games ahve families that talk back and forth through rooms to get their rating up playing cards.
It is a something most do not think about and the ones that try to decieve by trying to paint some one with a multiple alias is just a deceptive as the multiple alias and probably do have numerous aliases themselves.
I think in my 4 fours and tens of thousands of posts I have seen it all. Just have to ADAPT to each situation.
:=) Gary Swancey
Gary, nothing new here!
I even made a post on the avbc board awhile back about certain posters having the exact same typo's.(Right around the time of the ratings games) The only problem is I have never been able to carry it to the next level, and use the computer to do the tracking. Only some observations about typos, and common syntax.
Very interested to see how you have that system set up.
I have used a combination of similar typos, and message log spreadsheets over the years to figure out who I thought were the culprits. By spreadsheeting timelogs (time stamps for a particular post), and then overlapping them........I could get a pretty good picture of how a person just switches from one alias to another throughout the day.
Of course, in 2000, I noticed many of those suspects were doing something different because their multiple alias posts were becoming more inner-twined, and some of them even posted at the exact same times.(really threw me a curve ball, and I thought I had been wrong all along.)
Then one day you made that post about having all the different computer screens in your office...... remember I went balistic on you thinking YOU were one of them. I thought this was the answer......that they set their sweat shops up differently, with just multiple computers, rolling their chairs from one computer to the other.
Sure is a constantly changing game of cat and mouse!
Been thinking very hard about that BOP proposal. Love the idea. We just have to figure out how to make some cash with the concept. Have some ideas there too. I think there is alot of opportunity in the arena with all the deception going on.
Bird as the exposures get more and more complicated there is a syntax forensics that exist. I have talked about it for 4 years. Example: if I tried to hide under an aliase I will be discovered because of the syntax I use. Touche' = Toute" or "Another wrods, = In other words," and I have a lot more I use.
As you can see there are similiar and what I call rhetorical signatures. Today, I discovered one and I have spent the day search chat sites and even the internet for its use. "B-plan"
I could not pull up where this syntax was used (except in a company that uses it or in a URL). Now you would figure this was a common term where in fact, in all my searching only 4 chat messages contain this "b-plan" term only on RB under aliases that post on a dedicated thread.
Of course it is blown off but is it that easy to blow off. According to the Washington Post this is a valid synopsis.
http://washingtonpost.com/wp-dyn/articles/A24607-2000Dec18.html
Foster's breakdown of how he analyzes texts is easy enough to follow but hard to interpret for readers without losing some of its initial lucidity. My difficulties with translating his explanation may be related to one of Foster's key assertions: "No two people assemble words or sentences in precisely the same way." Our individual approaches to written communication -- the words, phrases and metaphors we choose -- amount to literary fingerprints in Foster's view, what he calls "attributional evidence." His own stylistic preferences are refreshingly free of academic jargon and rely heavily on self-deprecating humor. For instance, he observes: "Attribution is the one field within literary studies that requires one to state opinions, right or wrong, about matters of fact, and it is a wise attributor who peppers his statements with 'perhaps.' Scholars call this practice 'due caution.' The rest of the English-speaking world calls it 'covering your [rear].' "
Foster revisits several "cases" that he's worked on, including the search for Anonymous, author of the momentarily notorious political novel "Primary Colors" (Joe Klein confessed to the deed after initially denying it); the search for the author of the infamous "talking points" that Monica Lewinsky offered to erstwhile confidante Linda Tripp; and the pursuit of the "real" author of "A Visit From St. Nicholas." He also discusses, in roundabout terms, his work for the FBI. The feds approached him with a heady challenge that he found irresistible: "to develop a science of literary forensics, to adapt for the courts and, later, for criminal investigations, a methodology that was originally intended for the study of anonymous poems, plays and novels."
It's easy to recognize the similarities between criminal investigations and Foster's scholarly endeavors. Much as a detective or federal agent carefully inspects a crime scene, Foster scrutinizes "questioned documents" (QDs in his parlance) for signs of plagiarism, deception or other literary misdeeds. At other times, Foster's not looking for wrongdoing but simply attempting to solve a mystery, as in "Who wrote this?" To find out, he compiles a computer database consisting of the QD and anything else written by the suspected author. Then he compares the regular occurrence of words, phrases and constructions favored by the suspect -- a preference for which he or she is quite likely unaware. "The writer's syntax will usually remain fairly constant from one type of writing to another, whether it's a college essay, a letter to Mom, or a threat to kill the president," Foster tells us. "Give anonymous offenders enough verbal rope and column inches, and they will hang themselves for you, every time."
What is interesting is once you expose a poster with this syntax sluething they will immediately show guilt because their posts will change drastically in the cover up. They will be well written and done on a word processor. Then this makes the post even more difficult to pin to another poster that posts identical to another.
Thus after four years Bardology is a nice way to link posters to common syntax.
Just an observation
Gary Swancey
On Birds of Prey...
I've noticed a trend lately concerning my cybermoniker. So I thought I'd present a few bits of factual evidence concerning birds of prey.
Most raptors are not carrion eaters by preference. With the notable exception of the vulture class. Although many raptors will not shy away from an easy meal regardless of it's breathing status at the time, they will take the freshest meat available.
Peregrine Falcons have the strange predilection towards taking their prey in midair. They are the masters of the midair collision. They have even been known to attack other raptors in this manner.
While Dragon's are mythological beasts and therefore not subject to most of the accepted behavioral studies, legend has it that they preferred live meals...young and tender virgins were considered a staple of their diet. Although the occasional foolhardy nobleman seeking a fortune would often quell the pangs of hunger. I know of no depictions of these marvelous creatures partaking of anything other than their own fresh kill.
That's enough for now. Remember the famous last words of Sir Elmer of Fudd...
Be vewy vewy qwiet...I'm hunting fo' dwagon's!
David Weed
aka the Bird of Prey
www.warp-drive.com
Smouch you can post thought provoking issues yourself. Wish you had time to elaborate on some items of concern. I think it would assist those that are ignorant to avoid certain pitfalls in the market.
:=) Gary Swancey
Hey Bird you will know you are hitting nerves by the personal attacks you draw on issues that can no longer be conveniently addressed or white washed.
As I have learned that which attacks me is probably someone I have exposed over the years and their obession is true vengeance to the ulmost degree. Their emotions run amuck in their posts and rarely can they defend the issues just convenient personal attacks.
:=) Gary Swancey
Smouch I just get tired of ignorance and naive people who refuse to understand the current situation in the market. When the market is dead as a whole their is no relief blaming some DDer on line. Punish the innocent so you do not have to face reality.
I agree about that newbie who does not understand convertible debentures or preferred stock especially those with an ACC. Guess he will when he tried to buy more that the convertibles are shorting or selling. Everyone has to pay their dues in this arena.
I read one that stated something to the effect of "Flexible Transmution where x=aggregate divded by y=lowest counter offer of the last 30 days."
I liked to have flipped because my search has now explained to the old metal conversions which is where transmutation was originally the proper rhetoric.
Oh well. How about that Transfer Agetn printing press?
:=) Gary Swancey
Contracted Independent Investor Relations for
CBQI & DTGI, compensated a monthly cash fee
http://www.marketex.net/compensate.htm
Dave, I aggree 110%!
Although with you always flying around looking for that dead meat, I don't expect you'll ever have your feet firmly planted on the ground.
We'll see how many of them change their tunes after an easy view of some of the archives. Just love all those expert technical analysts over there lately. Been fun watching the brawls. Reminds me of a street fight when I was growing up in the windy city.
Smouch
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