Ooooh! That's a BINGO!!!
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
LOL....gotta say, you are a contrarian's delight.
Interesting that you show up to IHUB on THE DAY of the PR.
Of course, first response to you was misui calling you a basher (rather than welcoming you to this stock) A heck of a way to treat a newbie.
But I find your appearance perplexing. What is it that made you join today? Obviously you were already aware of the company.
It's pretty ironic that you chastise people regularly who you assume are rooting for you to lose money, and the first thing you say after good news is
"Hope you shorted the stock".....Not, "hey everyone! The stock price is rising!"
Are you considering yourself to be a good person?
I see you as a glass half empty kind of guy.
Shouldn't you try to be a better person than the posters who annoy you?
BTW, while I know nothing about how much closer to actually producing a product this makes the company (or even if you can trust the company PR this time), I did notice this morning at the opening, many small trade buys, but a few decent sized chunk sells. Someone isn't so confident. Just sayin'.
and yes, I'll say it....this stock has gone up before on news, which has turned out to be a big nothing burger. Until I see a different trading pattern, I see these as more opportunity for someone to dump.
02/29/24 09:34:23 AM 5 222607 0.2100
02/29/24 09:34:23 AM 5 0.2100 5 0.2179 75 X 25 BBO
02/29/24 09:34:19 AM 5 0.2100 5 0.2179 2301 X 25 BBO
02/29/24 09:34:15 AM 5 0.2100 5 0.2179 2226 X 25 BBO
How can you not be bearish??
You really shouldn't feel on an investment board as if you had to apologize or explain your reason for being now bearish.
You are behaving like a perfectly sane investor. Something that so many here should recognize.
Personally, I question ANYONE who makes excuses constantly for bad news and defends it.
When Walmart releases earnings, if it's had a bad quarter there are no analysts trying to convince you its a good thing.
Edit: LOL......then I finish reading the other posts and lo and behold, misui (who claims never to tell anyone how to trade their stock), immediately accuses you of being a basher and telling you that you shouldn't be posting!
How can the honest posters that are left here not see that as an indicator? In her books, if you aren't speaking glowingly, then you must be a paid basher.
So then, you don't want a reality, you just want gloating rights.
Not sure how you can complain about him all year, then pride yourself as acting just like him.
I think you two should make a bet and the loser has to change their name.
that's what I meant. You owe me a grub!
Something tells me, if he's correct on Friday, you will not want him to gloat.
I'm surprised to see Charlie had a relatively small position in Berkshire. At least compared to Warren.
Buffett (Warren Edward) 38.24 216,687 -1,600 -0.73 21-Nov-2023 13D 119,134.54 Low Individual Investor United States
Fidelity Management & Research Company LLC 5.85 33,168 0 0.00 31-Dec-2023 13F 1,774,915.86 GARP Low Investment Advisor Boston United States
First Manhattan Co. LLC 3.02 17,130 211 1.25 31-Dec-2023 13F 28,902.43 Deep Value Low Investment Advisor New York United States
Bartlett Wealth Management 1.11 6,314 6,237 8,100.00 31-Dec-2023 13F 9,516.52 Deep Value Moderate Investment Advisor Cincinnati United States
Norges Bank Investment Management (NBIM) 0.93 5,288 -619 -10.48 31-Dec-2023 13F 1,096,412.63 Core Value Low Sovereign Wealth Fund Oslo Norway
Munger (Charles T) 0.74 4,170 -100 -2.34 08-Mar-2023 Proxy
site appears to be back to normal????
Sure hope this isn't the "normal" we can expect going forward!
You've certainly figured out a way to keep me from posting here. Only takes about 5 hours per post and 30 attempts
This place sucks!
You stole my stinking GRUB that I've been waiting 20 years for!
I always knew if I ever got to 10,000 posts here, it would break the place.
First off, I find it funny that so many of you slam "bashers" when they post negative facts. And yet, applaud the posters who just post hopeful WAG's because you need to believe. You all don't want facts, you just want to feel good about your mistakes.
However, c'mon now.....some of you have GOT to find the comments from your CEO funny right now....I mean in a sad sort of way....
He claims to have written a screenplay and he's suing James Cameron on, because his screenplay is Avatar?!!
He also claims that he's never once converted restricted stock to free trading stock.
So,
A) He files lawsuits non-stop against EVERYONE!
B) He hasn't sold shares??? I guess having his wife do it doesn't count.
C) If you read the fine print on his own bio, he's added in there the right to sue anyone who quotes him directly.
I had a sit down with the CEO in Austin. They've shifted their direction since, but I like his willingness to bob and weave.
Not a recommendation though by any means.
Yikes! That looks like a wild one.
Have we ever discussed $HYLN?
Ya know, you all should be thanking me for getting deerballs out of here. He was the one who had been giving you all fake news and fake hope for so many years. Now, he's on another board just lying and lying.....and you all don't need to read that junk.
Glad to see some of you have removed your rose colored glasses, and are starting to understand this company is a share selling company for insiders.
You're welcome.
No kidding. I questioned some of his decisions through the year, but no more.
Talk about your auto Hall of Famer!
You are here attacking everyone none stop .
Especially since, if you look at historical prices, that was the day it hit an all time high. Cratered from there....
Jul 20, 2020 5.7800 6.7000 5.6500 6.3400 6.3400 11,255,500
Jul 17, 2020 5.4000 5.5000 4.9100 5.4500 5.4500 7,287,400
Jul 16, 2020 5.3200 5.5900 5.0600 5.4900 5.4900 7,075,800
Jul 15, 2020 4.9300 5.1800 4.5200 5.1300 5.1300 8,098,300
Jul 14, 2020 3.7600 4.8500 3.7600 4.8500 4.8500 9,957,500
Jul 13, 2020 3.2400 4.0500 2.8600 3.7000 3.7000 21,148,900
Jul 10, 2020 4.9000 4.9900 4.6100 4.7300 4.7300 8,737,700
Jul 9, 2020 5.4300 5.9000 4.6500 5.2200 5.2200 8,690,100
Jul 8, 2020 6.0000 6.0800 4.7600 5.3400 5.3400 14,052,700
Jul 7, 2020 6.4100 6.6200 5.8500 5.9300 5.9300 6,355,900
Jul 6, 2020 6.5600 6.9800 6.2700 6.4100 6.4100 7,840,400
Jul 2, 2020 7.1400 7.1500 5.9000 6.0800 6.0800 9,476,500
Jul 1, 2020 6.0600 7.0700 5.7500 6.4800 6.4800 17,025,200
Jun 30, 2020 9.6600 10.0100 4.6500 5.6800 5.6800 56,325,800
Other posters have claimed they are here because of you....they also see you as an expert. Mainly because you have declared yourself one so many times. Even claiming you know far more than the doctors at hospitals who were taking care of your son.
Face it.....you're an accomplice to this scam.
Meanwhile, what do you think of the fact that moneycrew used to have a team to control the stock price here. But now, he won't even own a single share?
This stock is SOOOO cheap, and SOOOO close according to you, but one of the main contributors to this board says he won't own it.
Not a single freakin' share! Even though he says he is quite well off and could if he wanted to.
So, to inform any newbies....
We have a doctor who is more concerned with posting on an investment board than a medical board (to try to get the drug approved) and an investor who refuses to own shares on THIS, an investment board.
Lets also not forget the doctor is editing the Wikipedia page about the drug for her own benefit....something else, a lawsuit might want to be aware of.
Learn to read all aspects from a neutral point of view and once you can do that you will know how to judge accordingly in a fair manner.
I wonder what the difference in holdings is between PHO and FIW? Are you saying FIW is lower cost? That's interesting.
I'm thinking a fair value for RTX is closer to $110.
Yeah, I do have multi million invested. Funny thing is, no matter what you have, it doesn't feel like enough lately the way........Dang it! A golf ball just hit my window next to me! .....anyway, inflation is going to be a far more brutal problem than people realize. Ran some numbers last year and for those who had thought $1 million was the amount they needed to retire comfortably, I think was now closer to $2.3 million....and that was last year!
With the lifestyle we choose to live, and considering the spousal_units family all live to 104, a good number is probably at least double....but that's not factoring in health issues or market corrections.
The only guys I know who don't seem to be worried at all what they spend are the $50 million+ buddies of mine. Since I'm not yet there, all these trades count.
Meanwhile, there's a college tournament outside my house and these kids keep trying to reach the green!!
No. No faith in PANW at the moment. May bounce back up, or may break down. I'll just watch it I guess.
AVGO is one that I just lost track of. Had planned to buy it but forgot. Can't own everything.
Right now, if I'm gambling on one, I'm leaning toward a dividend payer.
Ð...Looking to buy $WSO around $373. If I miss it, I miss it, but looks promising and they just raised their dividend.
Currently $382.41
Support at $367 or so.
Price target $460.
Baseball History Says the Rangers Won’t Repeat. Bochy History Says That’s Only a Speed Bump.
A slow offseason has begat some concerning pitching. But if things go sideways, just remember: Bruce Bochy knows a thing or two about rallying teams after disappointing title defenses.
By
Jamey Newberg
| February 26, 2024|8:30 am
Bochy's Giants teams never defended a World Series championship. That didn't stop them from getting back to baseball's mountaintop. Joe Camporeale-USA
D Magazine
Baseball History Says the Rangers Won’t Repeat. Bochy History Says That’s Only a Speed Bump.
Bruce Bochy and his team sealed the deal on the road, winning the World Series at long last—in the 53rd season since the team had picked up stakes and brought Major League Baseball to town.
“I couldn’t be prouder of a group,” the manager would say afterward. “They played with heart and determination. They weren’t going to be denied.”
That was done and was said in 2010, when Bochy’s San Francisco Giants took care of their Fall Classic business against the Rangers in Arlington. But surely you’d already caught that—the dead giveaway was that when he and his current team achieved a similar feat last November, it was in the Rangers’ 52nd year in Texas.
Though the Giants didn’t go into 2010 as anything close to the favorites, taking down the Rangers in five games served notice that San Francisco was going to be a problem for the National League for the foreseeable future. A veteran lineup and rotation—which included 26-year-old Tim Lincecum, who had already won two Cy Young Awards and beat Cliff Lee twice in that World Series—had been boosted significantly by a pair of in-season arrivals, rookie catcher Buster Posey and rookie starting pitcher Madison Bumgarner. Oddsmakers tabbed the Giants as one of the two teams most likely to win the National League pennant in 2011.
And then they missed the playoffs altogether. By a good bit, it turns out: San Francisco was eight games back in the division and two teams back in the race for the wild card (which was claimed by the Cardinals; you might recall how they ultimately fared that fall). Despite returning most of their roster, adding Posey’s and Bumgarner’s first full seasons in the majors, and retaining the steady Bochy at the helm, the Giants not only failed to repeat like every winner since 2000 had before them—they were eliminated before they finished playing games. Not where any team wants to be, particularly a defending champion.
It happens. A lot, in fact. Since the Yankees repeated as champs in 2000, there have been 23 title-defending seasons. No champion has even made it back to the World Series the following year, let alone won it. In fact, only seven of those 23 reigning champions managed to win their division the following year. Of the other 16, six claimed a wild card berth—but another six had losing records. That leaves four teams: that quartet finished between six and 19 games back in their respective divisions.
Is it my intention to shut down all hopes of a repeat from the 2023 World Series champions? C’mon. The Rangers dabbled mightily in the unexpected—and in some cases, unprecedented—last year, so why stop now?
But there are, of course, factors aside from historical trends to overcome. Three-fifths of the pitchers the Rangers are paying to be major rotation factors (Jacob deGrom, Max Scherzer, and Tyler Mahle) won’t pitch until close to midseason, if then, and the organization has done little to shore things up for the meantime. Even if the current starting five of Nathan Eovaldi, Jon Gray, Dane Dunning, Andrew Heaney, and Cody Bradford deliver quality results, how many innings do they pitch? Starting pitchers get hurt—both the 34-year-old Eovaldi and 32-year-old Gray missed significant time in 2023—and Eovaldi is the only one of the five who wasn’t deposited into a relief role for the postseason run.
In their pennant-winning season in 2011, the Rangers got an extraordinary 157 starts from C.J. Wilson, Colby Lewis, Derek Holland, Matt Harrison, and Alexi Ogando, with Scott Feldman and new director of pitching strategy Dave Bush logging the other five. Super rare.
But even then, Feldman had made 78 starts over the three previous seasons, and Bush, 85. The depth the Rangers have behind their penciled-in five consists of non-roster invitees Adrian Sampson, Danny Duffy, and Jose Urena plus minor leaguers coming off largely uninspiring years including Owen White, Jack Leiter, Cole Winn, and Zak Kent. Among those seven, only Urena got starts in the majors last year, and he was winless in his 10 opportunities.
You can see why reuniting with the still-unemployed Jordan Montgomery would feel so, so right.
But whether or not the big lefty returns to enjoy a lifetime supply of plus-plus barbeque, Bochy isn’t accustomed to this much starting pitching upheaval. His 2010 Giants team may not have returned to the postseason in 2011—but they won the World Series again in 2012. They then missed the playoffs in 2013—with a losing record—but won a third title in 2014. One of the main ingredients of that odd, enviable run of success was rotation stability. During that five-year run from 2010 to 2014, the Giants got an average of 31 starts from Lincecum plus 29 starts each from Bumgarner and Matt Cain. MadBum’s number elevates to 32 if you don’t count his 2010 rookie season, which started with half a year in Triple-A and ended with eight scoreless innings in Game 4 of the World Series. In that same span, Bochy also got 30-start seasons out of Barry Zito (twice), Ryan Vogelsong (twice), Jonathan Sanchez, and Tim Hudson. Spot starts from the Todd Wellemeyers, Yusmeiro Petits, and Eric Surkamps of the world were outliers.
The Rangers are not set up for that kind of rotation consistency. Part of that, to be sure, is the changing nature of the game. Openers didn’t exist in Bochy’s early San Francisco years. Neither did the philosophy on managing starter usage. In 2023, 380 pitchers made starts; in both 2010 and 2011, that number was only 272. Injuries aren’t fully to blame.
But in the Rangers’ case, it’s also a function of the makeup of the staff—and here, injuries are in fact a major factor; they know deGrom, Scherzer, and Mahle won’t be ready for months. Widen the lens, and we also see that Scherzer and Heaney are on contracts that will expire after this season. Eovaldi probably is as well: if he doesn’t reach 156 innings this year, he hits the market. (He pitched 144 innings in 2023.) If Eovaldi does rack up that many innings, a $20 million player option vests for him to take or leave. Gray and Mahle are under contract for the next two years.
Longer-term arrangements do exist. Dunning is under club control through 2026, and deGrom through 2028. The Rangers can keep White, Leiter, Winn, and Kent around much longer, along with Brock Porter, Jose Corniell, Kumar Rocker, Mitch Bratt, Josh Stephan, Aidan Curry, and others they have high hopes for. But there’s nobody in that sentence Texas can pencil in just yet as far as down-the-road planning goes.
Saint Lewis, whom I used to name after the team that traded Montgomery to Texas, famously signed nothing but one-year deals with the Rangers after the two-year pact they handed him to return stateside following a two-season stint in Japan. There are things about Montgomery that evoke Lewis. The demeanor. The build. The guile that makes a lack of overpowering stuff a footnote. The postseason gear.
But if Montgomery were to come back on a one-year pillow deal—at this point, with camps open, it has to be a consideration at least—it certainly wouldn’t be a precursor to four or five more of those. Finding a way to make a long-term alliance work would give Texas a much better chance of achieving that rotation stability that Bochy enjoyed in San Francisco.
Whether it would lead to another run of three championships in five years is a lot to ask. There is some merit to the vision for 2025 mapping out even better than 2024, whether projecting a healthy-from-the-start deGrom or imagining a fully ready Wyatt Langford—or a robust TV deal. The rotation, though, doesn’t really feel poised for a repeat this year or a pennant the year after. A Montgomery return improves the outlook significantly. Otherwise, Texas might have to find a way to do more with less from its arms. We’re only a few short months removed from the Rangers winning a World Series by doing just that. There are worse traits than resourcefulness to try and build a dynasty from, even if the next ring doesn’t come right after the first one.
So then, your claim is, the insiders are using their personal accounts to pay the lawyers for their corporate work??
I wonder how you label that in your filings?? Gifts to lawyers?
You don't think, as a public company there would be an issue with an individual paying the legal fees for the company? Is this under "Goodwill"?
I swear...just when I think I've read every cockamamie ridiculous story, someone comes out with something even more outlandish.
I'm curious why the CEO wouldn't use his own funds, but instead use the funds of his wife's?
I don't believe they are staying in the fight for their beauty sleep. They could have packed up and moved on along time ago.
A long explanation of how shorting really works....
https://www.securitieslawyer101.com/2023/what-short-selling-is-and-isnt/
Short Selling: What It Is, and What It Isn’t
Sharing is caring!
Short Selling
Short selling, the practice of betting a stock will go down, not up, has been controversial since it was invented more than 400 years ago in the Netherlands. In the early 1600s, there was only one stock in Holland, or anywhere else. It was the Dutch East India Company, or VOC (Verenigde Oostindische Compagnie). Formed on March 20, 1602, it enjoyed a 21-year monopoly on trading in Asia granted by the Dutch government. Shares in the company could be purchased by any resident of the Netherlands, and then bought and sold in outdoor secondary markets. The company was extremely powerful, possessing quasi-governmental powers, but successful trading depended on many things: well-built ships, competent captains and efficient crews, good weather, peaceful trading partners, and so on. Insurance existed at the time and offered protection, but a few real disasters could cause the VOC’s stock price to plummet.
Short selling was invented by Isaac le Maire. He’d been one of the founders of the VOC in 1602 and served as a director for three years. In 1605, he was sacked amid accusations of fraud and embezzlement. He wasn’t imprisoned but was forced to sign a non-compete agreement, pledging not to become involved with companies of any nationality that traded beyond the Cape of Good Hope or the Strait of Magellan. He was cut off from involvement in the Asia trade, the business he loved and knew best.
He tried to start a rival company in France but without success. He then took a different approach. Like a modern activist investor, he wrote a long letter to the chairman of the VOC’s board of directors, pointing out what he saw as problems that were hurting the company’s profitability. One of his biggest concerns was a lack of transparency on the part of the board. Shareholders were given only scant information about the VOC’s performance. Board members were enriching themselves at the shareholders’ expense. The directors were unmoved by Le Maire’s letter, which demanded an audit and a new charter, and formally rejected it a month later. He needed a better plan.
And he found one: in 1609, he and some associates created the Groote Compagnie (Great Company) with the intention of bringing down the VOC. Le Maire used Groote Companie, financed by himself and his partners, to commence speculation by short-selling through forward contracts. (A forward contract is a customized contract to buy or sell an asset at a specified price at a future date. It can be used for hedging or speculation.) He and his men also spread false rumors of disaster on the high seas, and, with a government bookkeeper as their collaborator, they committed fraud by altering the shareholder register.
The first bear raids were effective but did not achieve the desired results. A dividend was distributed to shareholders, but they were still unhappy because it drove the stock price down. Dutch officials banned what is today called “naked” shorting—selling stock without first obtaining a borrow—but short selling itself remained legal. Le Maire and his friends had, alas, been shorting naked, and the ban on the practice ruined them. Le Maire himself left Amsterdam and died in poverty. Activist shareholders who didn’t stoop to fraud continued to protest the VOC’s high-handed treatment of them, and in 1623, succeeded in forcing the board to consent to a new company charter.
What’s Changed in Short Selling?
A little more than 400 years have passed since Le Maire’s pioneering bear raid. During that time, short selling has almost always been legal in the major financial markets. Retail investors have sometimes objected, fearing that it harms their prospects for long-term gain, but it’s generally agreed that shorting stocks is healthy for the public markets. In a bull market, it helps burst potentially dangerous speculative bubbles; in a bear market, shorts buying to cover can stop or at least slow a strong downtrend.
In 2008, when the U.S. markets cratered frighteningly, regulators banned the short selling of financial stocks following the collapse of Lehman Brothers. Most observers thought the ban, which was always intended to be temporary, was a good idea. But by Christmas Eve 2008, Christopher Cox, then SEC Chair, had doubts. “While the actual effects of this temporary action will not be fully understood for many more months, if not years, knowing what we know now, I believe on balance the commission would not do it again,” he told a Reuters reporter. His chief concern was the damage that had been done to liquidity. It was not Cox’s fault; he’d been subjected to a great deal of pressure from the Federal Reserve and the Treasury Department.
Once the crisis was over, the Federal Reserve Bank of New York commissioned a study called “Market Declines: What Is Accomplished by Banning Short-Selling?” Its authors noted in conclusion that “A statistical exercise conducted to determine the relationship between short-selling and stock returns finds that the two variables are minimally correlated.” In 2011, when some European markets temporarily banned shorting, the Brookings Institute weighed in on the subject:
Trying to prevent stock prices from falling, the U.S. banned short selling of financial stocks in September 2008. However, the prices of these stocks continued to fall, and the ban was lifted before it was due to end.
During its short life, the ban precluded institutional investors from engaging in legitimate hedging activities in financial stocks. For example, a long-time holder of a high-dividend stock could not short it to protect against price declines while continuing to receive its dividends.
Despite these and other accounts of lessons learned, many retail investors dislike the idea of shorting. Some even say they feel it’s “un-American,” which makes no sense. But regardless of their sentiments, shorting is here to stay. Given that, it’s best to be informed.
How Does Naked Shorting Work?
Obviously, the point of a short trade is the same as the point of any trade: to make money. Naked shorting, engaged in by Isaac de Maire so long ago, is, for the most part, forbidden by the SEC here in the United States. There is one major exception. Market makers are allowed to short naked in their role as middlemen to provide liquidity.
As an example, if Party A wants to buy 1,000 shares of Stock ABCD, he will submit an order to his broker. The broker will fill the order immediately. If he doesn’t have the stock in inventory—and most market makers don’t keep much inventory on hand—he’ll short naked to fill the order. So he’ll be short 1,000 shares of ABCD. Normally, that’s all in a day’s work; usually, within seconds or minutes, another client will appear, wanting to sell some ABCD. The market maker will buy his stock and will no longer be short. He’ll execute similar transactions throughout the day. While most of them will settle quickly, some may not. Under current market regulations, settlement is fixed at “T(rade)+2 (days). Trades that still haven’t settled by then will be considered “failures to deliver” or “fails.” Market makers and brokers have differing deadlines for delivery depending on the circumstances of the failure. Most do not normally encounter delivery problems, even if they’ve shorted naked a great many times during the trading session.
How Does Shorting Stock for Retail Players Work?
How, then, does shorting work for retail players? Let’s say Party A is feeling more adventurous and decides to short XYZZ, a stock he believes will take a beating when its annual report appears in a few days. He submits an order to sell 1,000 shares short. His broker fills it, obtaining a borrow from the account of a client of the brokerage who is long XYZZ. (The stock of any client who has a margin account can be borrowed. The broker does not have to ask permission. Clients who don’t want that to happen should have cash accounts, from which no stock can be borrowed.) Party A must have adequate collateral in his account to allow for the possibility that the stock may go up. The SEC’s Regulation T requires the client to have at least 150 percent of the value of the position at the time the short is created in his account. If the stock rises enough to exceed that amount, and the client doesn’t have that much in his account, he’ll have to add cash, sell other positions, or buy to cover his short. If that does not happen, Party A is free to keep his position for as long as he likes, but he’ll find himself paying a daily stock borrow fee for the privilege. He will, of course, have sold his position as soon as it was delivered to him, but will not have use of the funds realized from the sale until the position is closed.
Shorting is extremely risky, and not as profitable as hitting that elusive 10-bagger with a long position. The greatest profit a short can enjoy from a single position is 100 percent, minus fees. But should the stock he’s chosen skyrocket rather than tank, he’ll have to absorb the entire cost. He would then be caught in a classic short squeeze, praying to find a way out before he’s driven to bankruptcy. Theoretically, at least. In real life, his broker or clearing firm will probably buy him in before that happens.
Shorts, like longs, have price targets. When XYZZ has dropped enough to reach Party A’s target, he’ll order his broker to buy to cover. That accomplished, he can use his profit as he sees fit. Retail shareholders cannot short naked because no one will allow them to do so. Occasionally, a case of genuine intentional naked shorting appears among the SEC’s enforcement actions. A recent one that’s received a good deal of attention involves Hal D. Mintz and his firm, Sabby Management LLC, which managed two private funds. Sabby mismarked tickets for short sales, saying they were long sales. By selling without borrowing stock, the firm was unable to make delivery. In addition:
The SEC’s complaint further alleges that Sabby Management and Mintz tried to conceal their fraudulent trading, including by using securities acquired after the trades to make it appear to brokers executing the trades that they had complied with the requirement to have borrowed or located the shares prior to their trades. As the complaint alleges, when questioned by at least one broker regarding their trading, Sabby Management and Mintz repeatedly lied about the trading.
In the end, Hal D. Mintz profited to the tune of about $2 million, but he’ll be giving up more than that in penalties and disgorgement.
Brokerages keep an “easy to borrow” list and a “hard to borrow” list. Both are updated daily. Not much explanation is necessary, though we’ll add that hard-to-borrow stocks are likely also to be more expensive to borrow. The most important thing anyone thinking of shorting stocks, or even anyone watching what he believes are shorts dragging down the price of “his” stock, must bear in mind is that in the markets, no one accepts risk for anyone else. You’re on your own. No one will cut you a break on your daily fees, or hold back on a buy-in just because you’re a nice person. Contrary to the beliefs of some, trading is not a team sport.
The Department of Justice Investigates Short Selling
A couple of years ago, rumors began circulating about an investigation of professional short sellers. The backstory is unusual. It seems to have begun with a young lawyer with a Ph.D. in finance called Joshua Mitts, who teaches at Columbia University. Reuters explained a bit mysteriously that “[t]he 36-year-old securities law specialist has become an increasingly influential figure in the hot debate over activist short selling since publishing a 2018 analysis of trading data that suggested some players were manipulating the market.”
According to commentary about him, Joshua Mitts spent years compiling an impressive study. It’s suggested that his focus is activist shorts, including the well-respected Carson Block of Muddy Waters and Andrew Left of Citron Research. Left has said he’s being investigated—his home has been raided—but he doesn’t know why. Supposedly, it all has to do with Mitts, his work for the DOJ, and his report, which law enforcement and the regulators supposedly liked because it makes use of such a large sample of data. In 2018, he published his analysis of 1,720 pseudonymous posts attacking publicly listed stocks on the financial website Seeking Alpha between 2010 and 2017. His study found such posts were preceded by unusual and suspicious trading through stock options, a process he called “short and distort”.
What? Seeking Alpha? Pseudonymous posts by individuals no one’s ever heard of, even as a pseudonym, who are apparently playing options? What has any of that got to do with well-known figures like Block and Left? We might as well be talking about the meme stock APES who make daily videos about things of which they know nothing and, seeking immortality, post them to YouTube. Does Joshua Mitts have any idea that there’s a big difference between responsible professionals who do meticulous and time-consuming research and risk large amounts of their own money and the owners of a handful of options contracts pumping their picks anonymously at Seeking Alpha?
The short sale study itself is quite long and contains a good deal of math. Equations representing… something statistical. But what is the point? Pages and pages are dedicated to the question of why the authors of what are probably no better than reverse pumps choose not to use their names. The answer is simple: because that’s what people do on the internet. They use aliases. Mitts doesn’t seem to grasp that. He calls the study “Short and Distort.” He must have run across the term at Seeking Alpha. To set the record straight, it was invented in the early 2000s by a penny stock promoter called Gary Swancey, who posted on several websites as “Georgia Bard.” He was a nice man, but his mission was pumping. He died young in 2004.
Mitts believes these Seeking Alpha contributors are manipulating stocks through their options trading. Why, then, is the DOJ going after people like Left and Block?
In February 2022, Carson Block wrote a blistering response to Mitts’s paper, calling it Distorting the Shorts – A Refutation of Joshua Mitts’ “Short and Distort.” He begins with an objection to what he sees as Joshua Mitts’s conflicts of interest—he works with CEOs who believe their companies have been the victims of abusive shorting, and charges $900 an hour—and moves on to a critique of his methodology:
In other words, Joshua Mitts claims to have studied short sellers, but in fact studied almost entirely something else. He chooses a market cap cutoff that produces a “V” pattern. Mitts misattributes the “V” to report authors (let alone short sellers) when it is clearly driven by earnings announcements. He then trumpets $20.1 billion of mispricing (that doesn’t exist) as showing the significant damage that short sellers are supposedly doing when – forgetting all of the other problems with his analysis – this number is a drop in the ocean of his data. However, the problems with his research extend beyond just these.
That is the relatively nice part of Distorting the Shorts. He goes on to discuss a lawsuit Joshua Mitts lost badly in the U.K. and adds scathingly:
Despite Joshua Mitts not having actually studied short selling, in 2020, Mitts’ research was used as the basis for a petition to the SEC to enact rules on activist short selling that we believe would significantly curtail the industry. In 2021, numerous short sellers were served with search warrants and subpoenas in what appears to be a wide-ranging Securities and Exchange Commission and Department of Justice investigation into activist short selling. On February 7, 2022, the recently departed former chairman of the SEC, Jay Clayton, explained in a CNBC interview that this investigation “would be looking at as a regulator. First of all, there’s ‘short and distort.’” Businesses and lives are being turned upside down by this investigation, which is seemingly catalyzed by Mitts’ misrepresented, error-filled research. The ultimate casualty of a misguided investigation will be market accountability and investor protection.
The rest of the paper is equally brutal, and very much worth reading. Not only has Joshua Mitts consulted for clients convinced they’ve been victimized, but he’s also consulted for the Department of Justice. We do not understand why the Feds decided a person without any practical experience of the subject on which he claims to be an expert should be their new authority on short selling. Block concludes:
Mitts’ “Short and Distort” (2020) is a non-empirical, conflict-laden polemic based on misrepresentation, selective presentation of data, and lack of academic integrity. Its conclusion that pseudonymous activist short sellers manipulate mid- and large-cap stocks is contradicted by Mitts’ own data. If Mitts had written a short report on a company with comparable lack of rigor and misrepresentation, he would likely have significant legal exposure.
Has the Wind Shifted for Short Sellers?
If Mitts has offered a written response to Block, we haven’t found it. But Block did agree to debate Robert Jackson, a former SEC Commissioner, in July 2022. The subject was Mitts’s study. And at the same conference at the UC Berkeley Law School, Mitts did agree to be interviewed by Frank Partnoy, the professor who’d organized the conference and hoped originally to moderate a debate between Block and Mitts. The interview focused on Block’s white paper.
As the conference took place, Justin Weitz, the DOJ attorney in charge of the short-selling case, resigned. It now seems that over the past two years, Mitts’s popularity has faded, and his influence waned. Only 10 days ago, on December 11, 2023, Institutional Investor ventured another article about him, and the tone had changed. Mitts had written a new report, this one about how shorts in Israel had supposedly profited from the war with Hamas because they’d known it was going to happen. That idea was quickly—and, for Mitts, embarrassingly—debunked:
The report was “inaccurate and divorced from reality,” Yaniv Pigot, the executive v.p. of trading on the Tel Aviv Stock Exchange, told Israel’s Globes news outlet last week.
The problem, according to Pigot, is that the research assumed that shares in Bank Leumi were quoted in shekels instead of agorots (1 shekel is worth 100 agorots). That means short sellers earned $8.6 million, not $865 million.
The report was co-authored by Robert Jackson, the former SEC Commissioner who’d debated Carson Block in Berkeley.
Block also took the occasion to go after the short sellers’ nemesis, telling Institutional Investor in an email that the report is another example of how Mitts “chooses his narrative first. Next, he backfills by cherry-picking data, drawing unsupported — and often outright illogical — conclusions, which he then camouflages with a bunch of finance and math mumbo jumbo that his legal academy peers can’t see through.”
Two years after the DOJ investigation became public, no charges have been filed. The two top prosecutors have left the agency. Back in May, Avi Perry, head of the DOJ’s market integrity team, promised action on the case “in the next two months.”
There are signs the SEC does not share the DOJ’s deep suspicions about the activist short sellers. For the past five or six years, Nate Anderson’s Hindenburg Research has been producing research reports that have almost always proved deadly accurate. We don’t know if they’ve been questioned about the DOJ probe, but the SEC seems to approve of their work and finds it useful.
On June 6, 2023, Hindenburg announced it had taken a short position in Tingo Group, a Nasdaq-listed issuer. The accompanying research report revealed Tingo to be a sham company selling nonexistent products to nonexistent people, and making literally unbelievable claims in its financial reports. The report is long and well worth reading. It closes with:
Tingo is a word in the Pascuense language of Easter Island meaning, “to borrow objects from a friend’s house, one by one, until there’s nothing left.” For a company that did an otherwise terrible job trying to pretend to be a real business, it landed on an absolutely perfect name. We expect Tingo will not be long for this world—another cautionary tale.
Anderson was correct. Tingo quickly replied, nonsensically denying Hindenburg’s criticisms. Hindenburg responded at the end of August.
The SEC was following along. On November 13, it suspended trading in Tingo Group (TIO), the Nasdaq company, and in Tingo, Inc. (TMNA), an OTC issuer. The latter is also known as Agri-Fintech Holdings, Inc. The Commission wasn’t finished: a little more than a month later, on December 18, it sued both companies and Mmobuosi (Dozy) Odogwu Banye, their CEO. It also applied for and was granted a freeze on the companies’ and Mmobuosi’s assets. In the complaint, it’s noted that:
The scope of the fraud is staggering. Since 2019, Defendants have booked billions of dollars’ worth of fictitious transactions through two Nigerian subsidiary companies Mmobuosi founded and controls, reporting hundreds of millions of dollars of non-existent revenues and assets. For example, Tingo Group’s FY 2022 Form 10-K filed in March 2023 reported a cash and cash equivalent balance of $461.7 million residing in Tingo Mobile’s Nigerian bank accounts. Authentic bank records for the same accounts, however, show a balance of less than $50 for that period.
The complaint mentions Hindenburg’s work, calling the activist “Analyst A.” The attorneys also indicate that they opened their own investigation in early June. That was when Anderson published his first report. Clearly, the SEC found Anderson’s work helpful in their own investigation of the Tingo scam, and appears to harbor no suspicions about his intentions. We wonder if we’ll be hearing no more, or at least very little, about Mitts’s theories concerning Seeking Alpha posters.
One question remains. The suspensions of TIO and TMNA ended one minute before midnight on November 28. TMNA was moved to the Grey Market. TIO was immediately halted by the Nasdaq; the halt continues with no end in sight. What of the shorts in this situation? Something similar occurred in early May 2015 with Riviera Tool Company (RIVT). RIVT was an abandoned shell company. The company that had once inhabited the public shell had been spun off as a private entity some years earlier. And in 2015, that private company had been acquired by Tesla. Quite a few people jumped to the wrong conclusions and began to load the boat. An article appeared in an online publication, foolishly confirming the public shell company’s mistaken identity. Some people shorted. It was a sure thing.
Only 20 minutes before the close, FINRA imposed a U3 halt, used in situations that raise concerns about settlement or clearance. It was expected that the halt would continue for at least four days, so that RIVT would lose compliance with Rule 15c2-11 and be delisted to the OTC Markets Grey Market. But it seemed that FINRA had completely forgotten about it. It wasn’t until the first week of December that the halt was lifted.
That was unfortunate for everyone with a position in the stock. Longs lost whatever their stake had once been worth, but that had happened long before. Short sellers, however, had to continue to pay their daily stock borrow fees. Eventually, some who were active on message boards arranged with each other to ask their brokers to do wash trades for them, wiping out their positions.
We hope Tingo short sellers who didn’t cover before the suspension won’t be trapped forever, but will find a way to exit their positions. No trader should lose money for being right.
To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at info@securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Attorneys
Brenda Hamilton, Securities Attorney
200 E Palmetto Rd, Suite 103
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com
I'm not a shareholder anymore but Fartstain going to be writing some checks
I am soooo glad you posted this. I shall add it to my saved pile in case anyone asks for it. You claiming misui is an expert....
Are you claiming to be an expert in the medical field?
If you were an expert, you would give us your credentials.
You know MIsiu's very well.
She claims she is a physician/clinician and you claim nothing
I'm going to say....
I probably should dump my GNRC and replace it with WSO. I'm up about 6% in GNRC and it just hasn't seemed to run like I thought it would due to electric cars.
I'd say no to TRMB. Looks like it just had its pop to resistance.
Not sure how I missed DHR as I believe I posted about it a month ago to add.....but didn't. (maybe waiting on a pullback?)
Not sure why I'm waiting to add to PHO?
I've bought about $70k of RTX. Now I have to wait to add the additional $30k on a pullback.
OK, now we're talking.....$WSO might be the first one I've seen you haven't posted too late. Currently $383, and above $395 would be a confirmed breakout.
Or better yet, wait until it pulls back to $340 or so and buy half position there.
Is there a watch list indicator here on IHUB?
How is it you use terms you don't understand......and actually think you do?
There is nothing straw man about using your actual post to prove a point.
However, it looks like today you are admitting you AREN'T an investor, and are upset with people who point it out?? Yeah, that's called quoting facts.
So, you put money into a pump and dump stock and are upset when people expose it? Lemme guess.....you once again dumped GVSI before it got dumped? So you are either, a part of the pump and dump.....or you lost money again because you are stupid.
Either answer works for me.
So why are you so angry? Are you mad because people won't buy into your pump and dumps? Are you mad because people won't lose their money along with you?
I have her info around here somewhere. Don't know why I bother keeping all that stuff, except for the book I had promised to write long ago...or at least a miniseries.
The posting you do on GVSI is what makes you look so completely moronic. You actually think you're an investor??!!
You wonder why a person would criticize the manipulation of penny stocks.
delerious1
Member Level
Re: Lime Time post# 164275
Sunday, February 04, 2024 1:10:11 PM
Post#
164276
of 167782
🚀I will alway like this quote from someone who was there...."I was in Sharp’s last reverse merger ticker. I bought at .016, it ran to .359, I held almost all of it. It then went to .077, down 80%. I felt stupid, but I stayed the course. It ran to $1.93 and I won, selling shares along the way up." 🇨🇦🇧🇴🇴🇲
Ð......What the heck is this??? $DWAC.....is this a legit company? A manipulation machine? Who is funding this?
Business Description
Digital World Acquisition Corp is a blank check company. The Company is formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. The Company intends to focus on companies in the healthcare industry in the United States. The Company is not engaged in any business operations and has not generated any revenue.
About Digital World
Digital World Acquisition Corp. is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. While we may pursue an initial business combination target in any business or industry, we intend to focus on combining with a leading tech company.
Who funds this "company"?
What an astute and well thought out post.
How could anyone not learn from you?
I can see you put a lot of research and effort into your thought process.
Ya know, if there is anyone who has failed, it's you. You've spent years trying to pump up the share price and the stock price keeps falling and falling.
So lets see, you like research....perhaps you can research why the stock price keeps going down with ALL THAT GREAT news out there.
Is it the fault of bashers??? Can't be. You've already proclaimed bashers aren't getting anyone to sell....
Hmmmmm, I wonder what IS getting people to sell?
Maybe it is a government worldwide plan to prevent CYDY stock from going to a quarter?
BTW, have you noticed how happy monroe seems lately?
Then why did you click you are bearish?
I definitely recognize the company has value, but it has run up on pure hype and euphoria. The P/E has even caught up with NVDA which I didn't think possible.
I was going through some old emails today and came across one from my old buddy Mark Cuban, who had sent me this about 20 years ago. I can't think of a more apropos place to post this....It's a fairly long read, but well worth it. I think he posted it elsewhere after.
Wednesday, February 01, 2006 2:47:50 PM
The Stock Market
I get asked all the time to write a book about business and my approach to it. I’m not ready to take that leap yet, but along the way, when I find a book that really impresses me, I try to help it find an audience. In this case, it wasn’t long ago I read my now favorite book about the stock market called The Number by Alex Berenson. I liked it so much, I volunteered to write the forward for the paperback edition which comes out this week.
Here is the foreward I wrote for The Number. I recommend that anyone with an interest in the market jump at the chance to buy it.
In 1990, I sold my company, MicroSolutions — which specialized in what at the time was the relatively new business of helping companies network their computer equipment — to CompuServe. After taxes, I walked away with about $2 million. That was going to be my nest egg, and my goal was to protect it at all costs, and grow it wisely.
I set about interviewing stockbrokers and settled upon a broker from Goldman Sachs, Raleigh Ralls. Raleigh was in his late 20s, and relatively new to Goldman. But we hit it off very well and I trusted him. As we planned my financial future, I made it clear that I wanted my nest egg to be invested not like I was 30 years old, but as if I were 60 years old. I was a widows and orphans investor.
Over the next year I stuck to my plan. I trusted Raleigh, and he put me in bonds, dividend-paying utilities and blue chips, just as I asked.
During that year, Raleigh began asking me a lot of questions about technology. Because of my experience at MicroSolutions, I knew the products and companies that were hot. Synoptics, Wellfleet, NetWorth, Lotus, Novell and others. I knew which had products that worked, didn’t work, were selling or not. How these companies were marketed, and whether or not they were or would be successful.
I couldn’t believe that I would have an advantage in the market. After all, I had read A Random Walk Down Wall Street in college. I truly thought that the markets were efficient, that any available knowledge about a company was already reflected in its stock price. Yet I saw Raleigh using the information I gave him to make money for his clients. He finally broke me down to start using this information to my advantage to make some money in the market. Finally after more than a year, I relented. I was ready to trade.
Notice I didn’t use the word invest. I wasn’t an investor. I just wanted to make money. The reason I was ready to try was that it was patently obvious that the market wasn’t efficient. Someone like me with industry knowledge had an advantage. My knowledge could be used profitably. As we got ready to start, I asked Raleigh if he had any words of wisdom that I should remember. His response was simple. “Get Long, Get Loud”.
Get Long, Get Loud. As we started buying and selling technology stocks, most of which were in the local area networking field that I had specialized in at MicroSolutions, Raleigh put me on the phone with analysts, money managers, individual investors, reporters, anyone with money or influence who wanted to talk technology and stocks.
We talked about token ring topologies that didn’t work on 10BaseT. We talked about what companies were stuffing channels - selling more equipment to their distributors than the distributors really needed to meet the retail demand. We talked about who was winning, and who was losing. We talked about things that really amounted to the things you would hear if you attended any industry trade show panel. Yet after hanging up the phone with these people, I would watch stocks move up and down. Of course as the stocks moved, the number of people wanting to talk to me grew.
I remember buying stock in a Canadian company called Gandalf Technologies in the early 90s. Gandalf made Ethernet bridges that allowed businesses and homes to connect to the Internet and each other via high-speed digital phone lines called ISDN.
I had bought one for my house and liked the product, and I’d talked to other people who’d used it. They had decent results, nothing spectacular, but good enough. I had no idea Gandalf was even a public company until a friend of Raleigh’s asked me about it. What did I think about Gandalf Technologies? It was trading at the time at about a buck a share. It was a decent company, I said. It had competition, but the market was new and they had as much chance as anyone to succeed. Sure, I’ll buy some, and I would be happy to answer any questions about the technology. The market size, the competition, the growth rates. Whatever I knew, I would tell.
I bought the stock, I answered the questions, and I watched Gandalf climb from a dollar to about $20 a share over the next months.
At a dollar, I could make an argument that Gandalf could be attractive. Its market was growing, and compared to the competition, it was reasonably valued on a price-sales or price-earnings basis. But at $20, the company’s market value was close to $1 billion - which in those days was real money. The situation was crazy. People were buying the stock because other people were buying the stock.
To add to the volume, a mid-sized investment bank that specialized in technology companies came out with a buy rating on Gandalf. They reiterated all the marketing mishmash that was fun to talk about when the stock was a dollar. The ISDN market was exploding. The product was good. Gandalf was adding distributors. If they only maintained X percentage of the market, they would grow to some big number. Their competitors were trading at huge market caps, so this company looks cheap. Et cetera, et cetera.
The bank made up forecasts formulating revenue numbers at monstrous growth rates that at some point in the future led to profits. Unfortunately, the bank couldn’t attract enough new money to the stock to sustain its price. It didn’t have enough brokers to shout out the marketing spiel to entice enough new buyers to pay the old buyers. The hope among the “sophisticated buyers” was that one bank picking up coverage would lead to others doing the same. It didn’t happen. No other big investment banks published reports on the stock. The volume turned down.
So I did the only smart thing. I sold my stock, and I shorted it to boot. Then I told the same people who asked me why I was buying the stock that I had shorted the stock. Over the next months, the stock sank into oblivion. In 1997, Gandalf filed for bankruptcy. Its shares were canceled - wiped out - a few months later. I wish I could take credit for the stock going up, and going down. I can’t. If the company had performed well, who knows what the stock would have done?
But the entire experience taught me quite a bit about how the market works. For years on end a company’s price can have less to do with a company’s real prospects than with the excitement it and its supporters are able to generate among investors. That lesson was reinforced as I saw the Gandalf experience repeated with many different stocks over the next 10 years. Brokers and bankers market and sell stocks. Unless demand can be manufactured, the stock will decline.
In July of 1998, my partner Todd Wagner and I took our company, Broadcast.com, public with Morgan Stanley. Broadcast.com used audio and video streaming to enable companies to communicate live with customers, employees, vendors, anyone with a PC. We founded Broadcast.com in 1995, and we were well on our way to being profitable. Still, we never thought we would go public so quickly. But this was the Internet Era, and the demand for Internet stocks was starting to explode. So publicly traded we would become and Morgan Stanley would shepherd us.
Part of the process of taking a new company public is something called a road show. The road show is just that. A company getting ready to sell shares visits the big mutual funds, hedge funds, pension funds - anyone who can buy millions of dollars of stock in a single order. It’s a sales tour. 7 days, 63 presentations. We often discussed turning up the volume on the stock. It was the ultimate “Get Loud.” Call it Stockapalooza.
Prior to the road show, we put together an amazing presentation. We hired consultants to help us. We practiced and practiced. We argued about what we should and shouldn’t say. We had Morgan Stanley and others ask us every possible question they could think of so we wouldn’t look stupid when we sat in front of these savvy investors.
Savvy investors? I was shocked. Of the 63 companies and 400-plus participants we visited, I would be exaggerating if I said we got 10 good questions about our business and how it worked. The vast majority of people in the meetings had no clue who we were or what we did. They just knew that there were a lot of people talking about the company and they should be there.
The lack of knowledge at the meetings got to be such a joke between Todd and I that we used to purposely mess up to see if anyone noticed. Or we would have pet lines that we would make up to crack each other up. Did we ruin our chance for the IPO? Was our product so complicated that no one got it and as a result no one bought the stock? Hell no. They might not have had a clue, but that didn’t stop them from buying the stock. We batted 1.000. Every single investor we talked to placed the maximum order allowable for the stock.
On July 18, 1998, Broadcast.com went public as BCST, priced at 18 dollars a share. It closed at $62.75, a gain of almost 250 percent, which at the time was the largest one day rise of a new offering in the history of the stock market. The same mutual fund managers who were completely clueless about our company placed multimillion orders for our stock. Multimillion dollar orders using YOUR MONEY.
If the value of a stock is what people will pay for it, then Broadcast.com was fairly valued. We were able to work with Morgan Stanley to create volume around the stock. Volume creates demand. Stocks don’t go up because companies do well or do poorly. Stocks go up and down depending on supply and demand. If a stock is marketed well enough to create more demand from buyers than there are sellers, the stock will go up. What about fundamentals? Fundamentals is a word invented by sellers to find buyers.
Price-earnings ratios, price-sales, the present value of future cash flows, pick one. Fundamentals are merely metrics created to help stockbrokers sell stocks, and to give buyers reassurance when buying stocks. Even how profits are calculated is manipulated to give confidence to buyers.
I get asked every day to invest in private companies. I always ask the same couple questions. How soon till I get my money back, and how much cash can I make from the investment? I never ask what the PE ratio will be, what the Price to Sales ratio will be. Most private investors are the same way. Heck, in Junior Achievement we were taught to return money to our investors. For some reason, as Alex points out in The Number, buyers of stocks have lost sight of the value of companies paying them cash for their investment. In today’s markets, cash isn’t earned by holding a company and collecting dividends. It’s earned by convincing someone to buy your stock from you.
If you really think of it, when a stock doesn’t pay dividends, there really isn’t a whole lot of difference between a share of stock and a baseball card.
If you put your Mickey Mantle rookie card on your desk, and a share of your favorite non-dividend paying stock next to it, and let it sit there for 20 years. After 20 years you would still just have two pieces of paper sitting on your desk.
The difference in value would come from how well they were marketed. If there were millions of stockbrokers selling baseball cards, if there were financial television channels dedicated to covering the value of baseball cards with a ticker of baseball card prices streaming at the bottom, if the fund industry spent billions to tell you to buy and hold baseball cards, I am willing to bet we would talk about the fundamentals of baseball cards instead of stocks.
I know that sounds crazy, but the stock market has gone from a place where investors actually own part of a company and have a say in their management, to a market designed to enrich insiders by allowing them to sell shares they buy cheaply through options. Companies continuously issue new shares to their managers without asking their existing shareholders. Those managers then leak that stock to the market a little at a time. It’s unlimited dilution of existing shareholders’ stakes, death by a thousand dilutive cuts. If that isn’t a scam, I don’t know what is. Individual shareholders have nothing but the chance to sell it to the next sucker. A mutual fund buys one million shares of a company with your and your coworkers’ money. You own 1 percent of the company. Six weeks later you own less, and all that money went to insiders, not to the company. And no one asked your permission, and you didn’t know you got diluted or by how much till 90 days after the fact if that soon.
When Broadcast.com went public, we raised a lot of money that certainly helped us grow as a company. But once you get past the raising capital part of the market, the stock market becomes not only inefficient, but as close to a Ponzi scheme as you can get.
As a public company, we got calls every day from people who owned Broadcast.com stock or had bought it for their funds. They didn’t call because they were confused during our road show, were too embarrassed to ask questions and wanted to get more information. They called because they wanted to know if the “fundamentals” - the marketing points - they had heard before were improving. And the most important fundamental was “The Number,” our quarterly earnings (or in our case, a loss). Once we went public, Morgan Stanley published a report on our company, as did several other firms. They all projected our quarterly sales and earnings. Would we beat The Number?
Of course, by law, we were not allowed to say anything. That didn’t stop people from asking. They needed us to beat the forecast. They knew if we beat The Number the volume on the stock would go up. Brokers would tell their clients about it. The Wall Street Journal would write about it. CNBC would shout the good news to day traders and investment banks that watched their network all day long. All the volume would drive up the stock price.
Unfortunately, patience is not a virtue on Wall Street. Every day, portfolios are valued by at closing price. If the value of your fund isn’t keeping up with the indexes or your competition, the new money coming in the market won’t come to you. It just wasn’t feasible for these investors to wait till the number was reported by companies each quarter. The volume had to be on the stocks in you fund. To keep the volume about a stock up, and the demand for the stock increasing, you needed to have good news to tell.
Volume, The Number, whisper numbers, insiders granting themselves millions and millions of options - these are the games that Wall Street plays to keep on enriching themselves at the expense of the public. I know this. I have tried to tell people to be careful before they turned over their life savings and their financial future to someone whose first job is to keep their job, not make you money.
Till I read The Number by Alex Berenson, I never had a book that explained how the market truly worked that I could tell my friends, family and acquaintances to read. I never had a book that would truly warn them that the market was not as fair and honest as mutual fund and brokerage commercials made them out to be. I may be a cynic when it comes to the stock market, but I am an informed cynic, and that has helped me make some very, very profitable decisions in the market.
If you are considering investing in the market, any part of it, or if you are considering giving your hard earned money over to someone else to manage, please, please read The Number first.
How about today?