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"...what's the advantage of being a non-reporting company and being on the Pink Sheets?"
As long as your company is not reporting company you're allowed to do a Reg D 504 or 505 Offering, which allows you to raise up to $1,000,000 in a twelve month period. Regulation D, Rule 504 of the Securities Act of 1933, establishes an exemption from Securities Act registration for the offer and sale of up to $1 million of securities in a 12 month period. If you are a reporting company, you can't do a 504 or 505 Offering.
Frequently Asked Questions
What is the difference between a non-trading shell and a trading shell?
The major difference is that a non-trading shell, while legally a public corporation, is not listed or approved for trading. A trading shell's stock has already been approved for trading.
What does it take to get the stock of a non-trading shell trading?
That depends on your vision for your company and where you want your stock to be listed. If you want to stay a non-reporting company, your company can trade on the Pink Sheets (OTC). You'll need to file a document called a 15c2-11 with NASDAQ, which once accepted, will allow your company's stock to trade on the OTC .
If you want your company's stock to be listed on the Bulletin Board (OTCBB), you'll need to become a reporting company. The first step is to file a disclosure document and Form 10 or SB1 with the SEC. Once that's accepted, you can file a 15c2-11 with NASDAQ for a symbol and price for your stock.
What are the Pink Sheets?
Published daily, the Pink Sheets list publicly owned corporations whose securities are being traded by various market makers. Generally, these companies have not yet achieved the minimum criteria for listing in the NASD system. The Pink Sheet listings provide the names, phone numbers and subject quotes of each market maker for the various securities.
The Pink Sheet listing is usually initiated by the various market makers. There are no minimum business or reporting requirements to get listed in the Pink Sheets. They can provide an important link to re-establishing trading for an inactive shell corporation.
What's the value of becoming a reporting company and being traded on the Bulletin Board vs. trading on the Pink Sheets?
When you are a reporting company and file with SEC, information about your company is made available to the public. Having a means to get information about your business, helps the public evaluate whether or not they want to buy your stock. Because people can look-up your company's information on their own, rather than relying on a market maker to approach them, the market for your stock is broadened. Also, some people and businesses won't buy pink sheet stocks, for example, banks and insurance companies.
Conversely , what's the advantage of being a non-reporting company and being on the Pink Sheets?
As long as your company is not reporting company you're allowed to do a Reg D 504 or 505 Offering, which allows you to raise up to $1,000,000 in a twelve month period. Regulation D, Rule 504 of the Securities Act of 1933, establishes an exemption from Securities Act registration for the offer and sale of up to $1 million of securities in a 12 month period. If you are a reporting company, you can't do a 504 or 505 Offering.
What is a 15c2-11?
A 15c2-11 is a relatively simple, cost-efficient filing process that, upon approval, provides a corporation with a market to publicly trade its registered securities.
What is the application process for a 15c2-11?
The Company must first undergo due diligence by the broker/dealer, where particular attention is paid to the issuance of outstanding shares, to whom and at what price they were issued, and free trading versus restricted shares. The broker dealer then files a Form 2-11 with the NASD. The NASD returns comments within approximately one week. Once comments are sufficiently answered and the NASD declares the filing effective, the stock will trade on the OTC-Bulletin Board, subject to company becoming a reporting company under the Securities Echange Act of 1934. The entire process typically takes 60 to 120 days.
What is a market makers role in the initial trading of the company's stock?
The market maker stands ready to buy or sell a particular security. In the filing process, the broker dealer must justify the valuation of its bid/offer price to the NASD. Therefore, when approved, it is not uncommon for the market maker to post "no-bid, no-offer", unless there is an unsolicited customer order.
Which states can the stock trade in?
Manual exemption services, offered by both Standard and Poors and Moodys, currently "Blue Skies" Securities in 38 states. However, trades between dealers to domestic dealers as well as dealers to international dealers are exempt from the Blue Sky laws.
http://www.goingpublicnow.com/faq.html
That might be your real problem..LOL
Practise makes perfect, especially for those people who are regular targets of the RB TOS campaigns.
Try clearing your cache and cookies..it sometimes helps.
Wall Street's Dark Corners
Carrie Coolidge, 05.26.03
Along with a fair amount of dreck, the Pink Sheets are home to some obscure bargains.
How would you like to trade stocks where there's minimal disclosure, low liquidity, abundant scams and legions of the walking dead--shares of bankrupt companies like Enron or empty shells of merged-away ones like Boston Chicken, now a McDonald's unit? This is the universe of the Pink Sheets, dwelling place of companies that for one reason or another (usually, having fewer than 500 investors) are not required to file financial reports with the Securities & Exchange Commission. Such a regulation-free place is too scary for many.
But not for James E. Mitchell, a 62-year-old investor in Costa Mesa, Calif. who has made a vocation out of trolling the Pink Sheets for thinly traded value stocks. Mitchell's $55 million investment outfit, Mitchell Partners, claims that since its founding in 1980 it has averaged an annual return for investors of 16.5% before fees. Even after expenses and a small take for Mitchell, that leaves 14.6% a year for the limited partners, against 12.7% for the S&P 500 index.
A lot of good stocks lurk in the Pink Sheets (see table), along with a large quantity of trash. Some are foreign names, like Switzerland's Nestlé, leery of U.S. regulatory requirements. Some are family-controlled outfits that don't want to bother with analysts and like to keep stock prices low for estate-planning purposes. Good value plays are available, and classic value investor Warren Buffett is known to shop in the Pinks. Because these oddball stocks tend to trade infrequently, volatility is not a concern. "This allows me to sleep well at night," says Mitchell.
One victory he still relishes was with Steelcase, the office furniture maker, which he bought in 1993 and sold in 1998 when it offered shares to the public and went on the New York Stock Exchange. He tripled his money in that stock.
The 99-year-old Pink Sheets are no longer published on their signature pink newsprint. In 2000 they moved to a Web site (www.pinksheets.com) where you can access such information as dividend yield, trading volume and recent price. Of course, with such thinly traded issues, the recent price may be from a long time ago. In early May, for instance, Ash Grove Cement had last traded Apr. 2.
Financial data ranges from good to scanty. Some take their investor relations very seriously, issuing press releases and quarterly results. But the overwhelming majority will only share results with shareholders.
One place to start in this murky business is with Walker's Manual, a 578-page book that contains research on 500 of the best unlisted companies. The manual culls out the penny stock scamsters and other obvious riffraff. Published annually since 1996, the book claims a certain objectivity--Walker's doesn't accept fees from the companies it describes--but it can't always offer audited numbers. (Then again, what's an audit of WorldCom or HealthSouth good for?) Note that the information typically is a year old; it takes awhile to gather. Walker's provides contact information for the company and names the marketmakers who trade the stock. You can get the manual at www.walkersmanual.com for $99 plus shipping.
The next challenge is finding shares to buy, not easy with such small public floats. A small Bethesda, Md. firm, Koonce Securities, specializes in Pink Sheet stocks; it charges $50 per trade and has a $25,000 account minimum. Dorsey & Co. in New Orleans has a commission of $50 and up and no account minimum. The commission is the least of your trading costs, however. The bid/ask spread at Ash Grove Cement is a yawning 9%.
Charles Schwab & Co. makes a market in a lot of Pink Sheet stocks; commissions range from $52 on a $1,000 trade to $720 on a $500,000 trade. Rivals are cheaper: E-Trade wants only a flat $20 and Ameritrade, $11. Schwab boasts a sizable inventory and, it says, can get you a better price than the competition.
When trading, use limit orders and exercise patience. With Ash Grove's bid at $123 and ask at $135, you might do well to go directly to the marketmaker, match the bid price and be prepared to get no bites for weeks. Since you cannot entirely avoid transaction costs, you shouldn't even be buying unless you can afford to hold on for a long time--like ten years.
The typical pattern when investing in a Pink is to buy a little at a time. "Usually when something is new to us, we won't buy more than a token amount of shares," says Mitchell. "Once we get to know the company better, we might then buy more." In 1985 Mitchell got interested in Rand McNally, a closely held, family-controlled publisher of maps and atlases. Wanting to research the company before buying his first shares, he wrote to McNally and asked for a copy of its most recent annual report. He was politely told: No way.
Flying blind, Mitchell was only willing to buy 100 shares of the stock then trading at $47. When this library card got him the data he needed from the company, he felt more comfortable. Between 1987 and 1993 he accumulated another 1,000 shares at an average cost of $150. The investment paid off in late 1997 when Rand McNally went private, buying back all of its stock at $465 a share. (Good timing: It ran into competitive trouble and filed for Chapter 11 in February. It emerged in April.)
Assuming you have avoided the pump-and-dump scams of penny stock peddlers, you may find that the closely held company you are interested in is more apt to understate than overstate its earnings. Insiders are likely to be competing with you for the scanty supply of shares for sale--either in purchases for their own accounts or in buy-ins to shrink the share base--and they may be hoping to keep a family member's estate tax bill down. "They are not concerned about short-term results, unlike listed public companies," says Andrew Berger, editor-in-chief of Walker's. These companies attract no institutional interest that would drive up prices. The big dogs don't like illiquid equities. Another plus: Few Pinks have option plans to dilute your stake.
Tables
Undervalued and Unlisted
http://www.forbes.com/forbes/2003/0526/174_print.html
More Blue Chips Hit the Pink Sheets
January 21, 2003 Dow Jones WebReprint Service®
Sliding Stock Prices and Scandals Boost Listings
In Obscure Corner of Market; How to Find Values
By JEFF D. OPDYKE
Staff Reporter of THE WALL STREET JOURNAL
The stock market's woes have pushed millions of investors into a little-known and lightly regulated corner of the financial markets: the so-called Pink Sheets.
Enron, WorldCom, Global Crossing and Kmart are among the former highfliers that ran into financial problems and were dropped by the major stock exchanges. As a result, investors in these companies are forced to buy and sell their shares in the Pink Sheets, a nearly 100-year-old stock-quotation service once printed literally on pink paper.
In the past year, some 300 companies have joined the Pink Sheets, now home to 3,300 stocks. Some are troubled companies kicked off the New York Stock Exchange or the Nasdaq Stock Market. Others are new companies without the wherewithal to join the bigger exchanges. An estimated $75 million a day trades in Pink Sheet issues. That is still tiny compared with the $41 billion in trades averaged by the New York Stock Exchange in December, but for many companies the Pink Sheets is the only place where you get a buy or sell quote.
Now, Pink Sheet stocks are getting more scrutiny from some Wall Street pros who see unrecognized values here. Hill Thompson Magid, one of the larger market makers — meaning they pair buyers and sellers — in Pink Sheet names, is getting more and more calls from closed-end mutual funds and hedge funds that want to invest in obscure companies with attractive valuations, says Nick Ponzio, president of Hill Thompson.
The Pink Sheets, owned by a privately held New York company, Pink Sheets LLC, has long been notorious for distressed companies and dubious penny stocks. But it is also home to hundreds of financially solid companies. Some are old-line firms like Anderson-Tully, a Memphis, Tenn., forest-products company that has been in business since 1889. In addition, some well-known foreign companies, such as Switzerland's Nestlé SA, trade in the Pink Sheets so they don't have to meet the financial-reporting requirements of the major exchanges in the U.S.
Still, trading in the Pink Sheets adds a definite layer of risk for investors. Corporate financial information is unusually scarce, sometimes nonexistent. Stocks may trade only a few times a month or not change hands for a year. Analyst research generally doesn't exist, so investors must do their own homework. There is so little trading in some stocks that exiting from a position can be very difficult. In the case of troubled companies like WorldCom, share prices can move in excess of 100% in a day. To top it off, there is far less regulatory oversight of Pink Sheet stocks, meaning investors need to be especially vigilant for stock-market scams.
For some investors, however, it is that very lack of oversight that makes the Pink Sheets attractive. Because financial data and research are so scarce, Pink Sheet stock valuations can be more attractive than on the major exchanges, where thousands of investors and analysts pick apart each company. Investors "can find plenty of quality companies trading at less than 10 times earnings, half their book value, paying nice dividends and that have good management," says Andrew Berger, editor in chief and owner of Walkers Manual of Unlisted Stocks, which publishes research on 500 little-known publicly traded companies, many of them Pink Sheet stocks.
Trading Pink Sheet stocks is best done through market makers like Koonce Securities, in Bethesda, Md.; Robotti & Co. in New York; or Pittsburgh's E.E. Powell & Co. All are well known in the business. Because few regulations exist regarding whose order must be filled first when two competing orders come in, it is generally best to go to a market maker that is routinely buying and selling in the Pink Sheets, as opposed to one that is there only occasionally.
Pink Sheet veterans say Charles Schwab Corp. customers are often successful at getting to tough-to-buy Pink Sheet stocks. Schwab says that is because it keeps an inventory of stocks in thousands of different companies, including many Pink Sheet names.
Pinksheets.com (www.pinksheets.com) is beginning to post selected companies' quarterly and annual reports. Many companies, even though they don't report to the SEC, post financial data on their own Web sites, or will send it if you call.
Many of the most-active shares on the Pink Sheets fetch just pennies apiece, and sometimes fractions of a penny. Lifeline BioTechnologies recently traded more than 25.23 million shares, landing in the top three among volume leaders for the day. The cumulative value of those shares, worth 1/100 of a cent apiece: $2,523.
At the other end of that spectrum: Anderson-Tully, for which investors currently are bidding $175,000 a share. Because it has fewer than 500 shareholders, Anderson-Tully doesn't file financial reports with the Securities and Exchange Commission. The company shares financial information only with shareholders. "We aren't going to distribute the information publicly" to anyone who calls up and asks for it before they invest, explains Chip Dickinson, Anderson-Tully's president.
For investors interested in the Pink Sheets, here is a sampling of some companies that Mr. Berger, of Walkers Manual of Unlisted Stocks, says are worth a look:
Computer Services, a 35-year-old provider of information-technology services to largely Midwestern community banks. "The company has been growing tremendously for over a decade," says Mr. Berger. The stock has risen to $32 a share from $10 a share during the bear market. The company's stock trades several times a week, and the company Web site, csiweb.com, posts a wealth of investor information.
Old Fashion Foods, the largest independent vending-machine company in Georgia. The company has always been profitable, Mr. Berger says, and its book value of around $11 a share exceeds the last quoted price of $7. The shares traded once in January, once in December and once in October.
Palmetto Real Estate Trust, which pays out the vast majority of its earnings as a dividend. Currently the shares, at $1.55, yield in excess of 20%. In most cases, such a yield is a sign of trouble. "But that's not the case here," says Mr. Berger. "It's real." The problem is getting shares; the stock has traded only three times since October
http://webreprints.djreprints.com/674261001961.html
I'm not having any problems with RB, other than getting tossed every other day or so.
Something about "multiple aliases" but I only use one at a time. I think the Network Abuse Manager, "Fred" Carney, has amde me a personal crusade, because I say that some of the RB staff are helping the touts and 'enforcers" with their TOS campaigns.
LOL...whatever they're drinking it's toxic to brain cells.
You can find some really good papers at this site. Registration is free and easy
http://www.ssrn.com/
I believe some of those "true longs'" brains have been pickled in vinegar to preserve their transient thought impulses.
No signs of intelligence so far.
Cheap Talk on the Web: The Determinants of Postings on Stock Message Boards
PETER DAVID WYSOCKI
Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA)
--------------------------------------------------------------------------------
November 1998
University of Michigan Business School Working Paper No. 98025
Abstract:
This paper examines the cross-sectional and time-series determinants of message-posting volume on stock message boards on the Web. I test whether variation in message-posting volume is just noise or is related to underlying firm characteristics and stock market activity. Using a sample of over 3,000 stocks listed on Yahoo! message boards, I find that cumulative posting volume is, on average, highest for firms with extreme past returns and accounting performance, high market capitalization, high price-earnings and market-to-book ratios, high volatility and trading volume, high analyst following and low institutional holdings. Changes in daily posting volume are associated with earnings-announcement events and daily changes in stock trading volume and returns. Overnight message-posting volume is found to predict changes in next day stock trading volume and returns. Rational and behavioral explanations for the observed pattern in message-posting activity are discussed.
JEL Classifications: G12, G14
Working Paper Series
Abstract has been viewed 947 times
Go to Download Document Button to download paper from the SSRN Electronic Paper Collection
--------------------------------------------------------------------------------
Contact Information for PETER DAVID WYSOCKI (Contact Author)
wysockip@mit.edu (Email address for PETER DAVID WYSOCKI )
Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA)
Sloan School of Management
Cambridge , MA 02142
United States
617-253-6623 (Phone)
--------------------------------------------------------------------------------
Suggested Citation
Wysocki, Peter D., "Cheap Talk on the Web: The Determinants of Postings on Stock Message Boards" (November 1998). University of Michigan Business School Working Paper No. 98025. http://ssrn.com/abstract=160170
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http://papers.ssrn.com/sol3/papers.cfm?abstract_id=160170
Working papers.
http://pacific.commerce.ubc.ca/frank/workp.html
Capital Structure Decisions (with Vidhan Goyal), April 2003.
Internet Stock Message Boards and Stock Returns November 2002, (with Werner Antweiler).
Is all that Talk Just Noise? The Information Content of Internet Stock Message Boards Forthcoming, Journal of Finance. (with Werner Antweiler). The final revision was June 2003.
The JIT Inventory Revolution. What Actually Happened to the Inventories of American Companies Between 1981 and 2000? revised June 2003 (with Hong Chen and Owen Wu).
Monopoly Pricing When Customers Queue Revised July 2002, (with Hong Chen).
Trade Credit, Collateral, and Adverse Selection Revised January 1998, (with Vojislav Maksimovic).
Risk and Corporate Holdings of Highly Liquid Assets September 1996, (with Jess Beltz).
Internet Stock Message Boards and Stock Returns
Werner Antweiler and Murray Z. Frank
November 7, 2002
http://pacific.commerce.ubc.ca/antweiler/public/returns.pdf
Abstract
During 1999-2001 more than 35 million messages about public firms were posted
on Yahoo! Finance. This paper examines whether stocks with high posting levels also
have unusual subsequent returns and/or risk. They do. Stocks with the highest level
of posting have unusually high realized volatility and unusually poor subsequent returns.
This remains true after accounting for the effects of the market, firm size, value,
momentum and liquidity factors. Consideration is given to market manipulation, differences
of opinion, and anxiety reduction as possible explanations for the observed
patterns. (JEL: G12, G14)
Keywords: Internet Message Boards, Stock Returns, Volatility, Difference of Opinion
Both authors are at the Faculty of Commerce and Business Administration, University of British
Columbia, 2053 Main Mall, Vancouver BC V6T 1Z2, Canada. E-mail correspondence can be sent to the
corresponding author at murray.frank@commerce.ubc.ca. We would like to thank Sanjiv Das, David Hirshleifer
and Lubos P´astor for helpful comments, and Bruce Lehmann for comments that helped stimulate us
to undertake this study. We thank the SSHRC for financial support. The second author also thanks the B.I.
Ghert Family Foundation for financial support. All errors are ours.
1 Introduction
A recent real world innovation has created an opportunity to study the stock market
impact of the opinions of a significant class of individual investors—those who post messages
on internet stock message boards. A great many of the stock message boards came
into existence during 1998. Over the period 1999-2001 there were more than 35 million
messages posted about American firms on Yahoo! Finance. Given the sheer magnitude
of message posting activity, it seems plausible that the messages might reflect decisions
that have an impact.
This study examines whether the level of stock message posting on Yahoo! Finance
helps to account for stock returns. Firms are sorted into portfolios based on the number of
messages posted about the firm in the previous month. Portfolios are rebalanced monthly.
The returns for each portfolio are compared to each other, and they are also compared to
the distribution of a large number of randomly constructed portfolios.
The riskiness of these portfolios is considered in several ways. Both the realized
volatility (Andersen, Bollerslev, and Diebold, 2002) and the Sharpe ratios of the portfolios
are computed. These notions of risk do not reflect popular conditioning factors. In standard
asset pricing theory, stock returns are driven by common risk factors. Consideration
is then given to a number of factors that are known to affect stock returns: market, size,
value (Fama and French, 1993), momentum (Jegadeesh and Titman, 1993) and liquidity
(P´astor and Stambaugh, 2002).
Stock message boards could affect expected stock returns through an aggregate risk
channel if they provide a proxy for some form of aggregate uncertainty. This suggests
looking at ‘stock message board betas’; the sensitivity of a stock to the aggregate level of
message posting. In order to construct an empirical proxy for a message board factor, a
method patterned on Fama and French (1993) is used.
There are a number of ideas about how the message boards might affect the market.
For example, difference of opinion might be important. Suppose that people post messages
about the stocks for which there is considerable difference of opinion. Such stocks
might tend to be temporarily overvalued due to costly short selling as in the theory of
1
Miller (1977). In that case subsequent negative returns might be expected for the stocks
with unusually high message posting. In addition to differences of opinion, we consider
message posting as market manipulation, message posters as noise traders, and message
posting to reduce anxiety as candidate theories. The implications of these alternative hypotheses
are discussed in section 2.
We find that portfolios with particularly high message posting have abnormally poor
returns. The effect of the stock message boards is not proxying for a firm size effect. This
is shown by conducting two-way sorts using message posting and market capitalization.
The poor returns in the high message posting portfolios are accompanied by high volatility.
The top message posting portfolio has abnormally poor returns given the level of
volatility as measured by the Sharpe ratios.
Regressions explaining stock returns examine whether the effects of market, size,
value, momentum, and liquidity factors can account for the observed role of the message
boards. Since most of the stock message boards have only existed since 1998, we
examine the relative magnitudes of the intercepts across portfolios, rather than focusing
on whether the intercepts differ from zero. A monotonic pattern is found in which the
highest intercept values are found for the highest message posting portfolios. This effect
is robust to alternative specifications of the set of control factors.
It seemed possible that the message boards might be serving as a factor. When the role
of a message board ‘risk factor’ is studied, it does prove to be statistically significant and
economically large. The message board posting level contains information that affects
returns, but is not captured by overall movements in the market, size, value, momentum
or liquidity factors. The evidence is thus consistent with the idea that the number of messages
posted on the stock message boards reflects some aspect of risk that is not reflected
in the established factors.
Consistent with much of the asset pricing literature, this paper considers monthly
stock returns. It is also possible to study higher frequency data. In contrast to this paper,
Wysocki (1999), Das and Chen (2002), Das, Martinez-Jerez, and Tufano (2001), Tumarkin
and Whitelaw (2001), and Antweiler and Frank (2002) study stock message boards and
daily or intra-daily stock returns. While there are significant methodological differences
2
among these studies, there is no reliable short-term connection between message posting
and high frequency stock returns.
In section 2 the candidate hypotheses are discussed. Section 3 discusses the data construction
procedures. Some basic empirical regularities are presented. The portfolio construction
and returns are presented in section 4. It is shown that high message posting
is associated with low average returns. Section 5 discusses risk-based interpretations of
the portfolio results. The factor version of message board risk is studied in section 6.
Conclusions are provided in 7.
2 Hypotheses
Messages posted on internet stock message boards are public information. If market
prices fully reflect all public information, then internet stock messages might have no
predictive ability for subsequent stock returns. Support for this hypothesis in the context
of message boards has been found using daily data (Das and Chen 2001, Tumarkin and
Whitelaw 2001). However, these studies do not consider longer period stock returns.
To go beyond the natural null hypothesis of ‘no effect,’ it is helpful to consider the reasons
that people post messages on internet stock message boards. Since different people
appear to be posting for different reasons, there may be more than a single effect at work.
Some people appear to be posting in an attempt to manipulate the market as part of
an old-fashioned ‘pump and dump’ strategy. This kind of behavior has been a source of
concern to the SEC, and has resulted in legal action in a number of cases.1 To judge by
the cases that the SEC has made public, this kind of behavior seems to be concentrated in
smaller cap stocks.2 If this is the dominant reason for message posting, then high message
posting should be followed by the dump. The prediction is that negative stock returns
would follow high message posting. This effect should be predominantly found among
1Related information about the SEC’s Office of Internet Enforcement can be found on their web site
(http://www.sec.gov/divisions/enforce/internetenforce.htm).
2Similar cases are also reported from Canada. The Vancouver Sun (Sept. 25, 2002) reports that the British
Columbia Securities Commission took action against a Burnaby, BC man who posted hundreds of false messages
on stock message boards in a pump-and-dump scam that targeted penny stocks, gaining US$41,753
in illicit profits. The offender was fined C$25,000 and will have to pay back his illicit trading profits.
3
small capitalization stocks.
Some people appear to be posting either questions or tentative answers that ask for
further information. In these cases, people seem to be trying to make up their minds
about what to believe about the stock in question. This seems likely to reflect periods in
which there is significant difference of opinion regarding the stock. These differences of
opinion sometimes turn into rather nasty ‘flame wars.’
There is theory regarding financial markets with difference of opinion. Miller (1977)
and Duffie, Garleanu and Pedersen (2002) analyze what happens if short selling is dif-
ficult. According to Miller (1977) this means that not all negative views get expressed
in the market equilibrium. As a result, stock prices are upwardly biased while there are
significant differences of opinion. Duffie, Garleanu and Pedersen (2002) show that stocks
for which this short selling constraint is important can sell for more than the valuation of
any investor. This happens because the optimistic investors not only expect returns from
capital gains and from dividends, but also they expect to get extra fees from lending their
stocks to short-sellers. This added benefit is of greatest significance when differences of
opinion are particularly strong.
Antweiler and Frank (2002) have shown that message posting is positively correlated
with differences of opinion. Accordingly the stocks for which message posting is currently
high, might well be those that are on average temporarily overvalued. Negative
subsequent returns would be expected. In contrast to the market manipulation hypothesis,
this effect could equally well be found among large capitalization firms as among
smaller firms. Stocks over which there are significant differences of opinion might naturally
also be particularly volatile.
There is evidence that differences of opinion among stock analysts matters. Diether,
Malloy and Scherbina (2002) have studied difference of opinion among stock analysts in
the I/B/E/S database. Consistent with Miller (1977) and Duffie, Garleanu and Pedersen
(2002), stocks with significant difference of opinion among the analysts had poor subsequent
returns. Thus difference of opinion tend to be associated with overvaluation, rather
than having higher risk and higher returns.
Some people may simply post messages about riskier stocks precisely because these
4
stocks are riskier. Discussing the stocks might help alleviate their anxiety. In this case we
expect positive loadings on established risk factors. But the established empirical models
provide incomplete representations of risk as faced by investors (Fama and French, 1996).
As a result, we should expect to find particularly high intercepts in the high message posting
portfolios when we carry out the regression tests. This happens because the investors
know about the risks that they are taking even though the financial econometricians do
not.
The main ideas that we are investigating were stimulated by direct reading of a large
number of the messages.3 These hypotheses will be referred to as market manipulation,
differences of opinion, and anxiety reduction. These hypotheses are not mutually exclusive.
Accordingly, we are simply attempting to determine their relative helpfulness as
ways to think about the message boards.
3 Message Board Data
The first step was to download message headers for the more than 35 million messages
posted on the Yahoo! Finance message boards between January 1, 1999, and December 31,
2001. Yahoo Finance was inactive during two days during this period, 31 March 1999 and
4 February 2001, probably due to technical problems. Figure 1 shows the activity during
this period. 1999 was characterized by a growing interest in the message board, peaking
in early 2000 and settling on a monthly volume of about 1 million messages. By the end
of 2001, 6,802 message boards were available, of which 6,463 were operative with at least
a single message posted. A total of 5,911 boards had at least one week during which
posting volume exceeded 10 messages. Posting activity is around 15,000 messages per
day on weekends and around 35,000 messages per day on weekdays. Thursdays are the
most active posting days. The most heavily discussed company averages almost 25,000
3Another hypothesis is that the people posting the messages are ‘noise traders’ as in Delong, Shleifer,
Summers, and Waldmann (1990). In that model noise traders both create risk and get extra return in compensation.
Accordingly, one might predict that high message board posting would be associated with both
high risk and high return. Empirically this does not appear to be the right way to think about the role of
the message boards.
5
messages per month, but the median company receives only 23 messages per month.
Much of the analysis involves sorting firms into quintiles by message posting volume,
along with the creation of a portfolio of firms without message board. When firms
are sorted in this manner, the top message posting portfolio has a much higher market
capitalization ($10.66 billion) than does the bottom portfolio ($0.43 billion). The missing
message board portfolio has an average market cap of $0.79 billion. Thus we know that
market capitalization is not independent of message posting levels. In our analysis we
control for this by the use of two-way sorted portfolios. We also use firm size as a factor
in the regression analysis.
Some message boards are very active while others are much less active. Figure 2 plots
the number of messages (on a logarithmic scale) against the rank of the board. The first
firm is the company with the greatest number of messages, the second firm has the second
largest number of messages, and so on. The resulting curve is convex with a bend in the
function that is gradual, but centered at about firm rank 250. The curve becomes virtually
linear for higher ranks.
The financial data are taken from the Center for Research in Security Prices at the University
of Chicago (CRSP). Over the sample period that we study there were dramatic
price changes among internet related firms. Thus we consider three indices for the market:
CRSP(VW) is the CRSP value-weighted index, CRSP(EW) is the CRSP equal weighted
index, and ‘Internet Index’ is the Dow Jones Internet index that is traded under the ticker
symbol XLK.
These three market indices are plotted in Figure 3 and they follow quite distinct trajectories.
The CRSP(VW) has a fairly mild 5% decline over the three years. The CRSP(EW)
has a gain of 32% over the period. The fact that the equal-weighted index had a much
better return indicates that small firms outperformed large firms during our sample period.
The Internet Index has both a huge run-up and a huge decline during our period.
It is not clear whether the decline should be deemed to have started in March of 2000
(the peak), or August 2000. Since August 2000 is very close to the middle of our sample
period, we use this as a defining date to distinguish the Internet collapse period. The
6
movement in the Internet Index is remarkable. Over the first year and a quarter there
was an 80% increase in market price. From the peak to the end the decline is more than
50%, which left the index at less than 80% of where it was at the start. The Internet index
includes many of the most well-known Internet firms, making the decline particularly
remarkable. These were not penny stocks to start with.
There are some problems matching CRSP data with data from the Yahoo! Finance
message boards. Yahoo message boards are identified by ticker symbols that do not always
match the common use of such symbols. In particular, Yahoo compresses the share
class symbol and ticker symbol into a single code, which may lead to ambiguities when
matching it to ticker symbols used in CRSP. The matching of ticker symbols was done
based on the ticker symbols in effect on December 28, 2001. Despite hand coding and
searching, we are unable to match 313 stocks. These include primarily stocks of foreignowned
companies such as Air Canada or Ballard Power Systems. There may also be some
genuine mismatches due to ticker symbol errors.
A further problem that we encountered is that Yahoo seems to remove message
boards when companies cease to exist as can easily happen due to merger, acquisition,
or bankruptcy. As several of these stocks have ceased to exist by the end of 2001, we do
not have any posting activity information for these. In order to quantify the magnitude
of the problem, we created portfolio X which contains the stocks that exist in CRSP but
for which we cannot find a message board.
When controlling for known factors, the data on the market, size, value, momentum,
and risk-free interest rate are taken from Kenneth French’s web page.4 The method of constructing
the liquidity factor follows P´astor and Stambaugh (2002) and is described in the
appendix. Our method of constructing a message board factor is described in section (6).
4We are grateful to Kenneth French for making these time series available. They can be found on the
web at http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data library.html
7
4 Portfolios
4.1 Portfolio Construction
Portfolios are used to look for differences in returns.5 First, we leave out firms with stock
prices of less than $1 at each portfolio formation date. We do not remove firms based
on their market capitalization. Instead we examine the role of market capitalization as a
factor in its own right.
Second, each month we sort the stocks into quintiles according to the number of messages
posted about the firm on the stock message boards during the previous month.
Portfolio A contains the stocks with the highest number of messages, and portfolio E has
the smallest number of messages for that month. Deciles were also studied and gave very
similar results. To save space, the decile results are not reported separately. Not all firms
have message boards. Portfolio X contains the stocks for which we were not able to find
a stock message board on Yahoo! Finance.
Third, $1 is invested into each of the portfolios at the start of the month. The money is
equally invested in each stock in the portfolio given the currently prevalent stock price.
Results for value-weighted portfolios are also reported.
Fourth, at the start of the next month each portfolio is liquidated at current stock
prices. A new sort is then done and the money from a given portfolio is reinvested in
the portfolio defined by the same criterion at the start of the next month. This procedure
is repeated each month from the start of 1999 until the end of 2001. Two-way sorts based
on message posting and market capitalization are also considered.
While we can rank the results by eye, it is important to know if these final payoffs are
unusual. In order to determine if the observed portfolio returns are ‘unusual,’ we employ
a simple Monte Carlo procedure to generate a distribution of returns. We form 10,000
random portfolios in the same manner as portfolios A-E. Instead of ranking the stocks
by message board activity, we use random numbers to rank the stocks. We examine the
5Portfolios are frequently used to study asset returns. Examples include studies of momentum (Jegadeesh
and Titman, 1993), size and value (Fama and French, 1996), the probability of information-based
trading (Easley, Hvidkjaer, and O’Hara, 2002), disagreements among stock analysts (Diether, Malloy, and
Scherbina, 2002), and liquidity (P´astor and Stambaugh, 2002).
8
distribution of returns from the randomly formed portfolios. If a message board portfolio
falls in the extreme tails of the random distribution, then we regard the return on that
portfolio as being unusual.
A natural comparison to consider is the relation between our portfolio returns and
the returns on the market. To do this we consider the performance of $1 invested in “the
market” using the CRSP(EW) and CRSP(VW) as proxies. Since we know that CRSP(EW)
outperformed CRSP(VW) in our period, we know that it is important to control for market
capitalization. Smaller firms are often found to be riskier and to have higher returns. If
the message boards focus disproportionately on firms of particular sizes, then one might
misidentify a firm size effect as being a message board effect. In order to guard against
this, firms are also sorted according to their size: small, medium, or large. Consequently,
in addition to the basic message board ranked portfolios, results are also provided for
portfolios that interact message posting volume and firm size.
....MUCH more..
Is All That Talk Just Noise? The Information
Content of Internet Stock Message Boards
Werner Antweiler and Murray Z. Frank
First version: March 2001
This version: May 23, 2002
http://pacific.sauder.ubc.ca/antweiler/public/noise.pdf
Abstract
Financial press reports claim that internet stock message boards can move markets.
We study the effect of more than 1.5 million messages posted on Yahoo! Finance and
Raging Bull about the 45 companies in the Dow Jones Industrial Average, and the Dow
Jones Internet Index. The bullishness of the messages is measured using computational
linguistics methods. News stories reported in the Wall Street Journal are used as controls.
We find significant evidence that the stock messages help predict market volatility, but
not stock returns. Consistent with Harris and Raviv (1993), agreement among the posted
messages is associated with decreased trading volume. (JEL: G12, G14)
Keywords: Volatility, Trading Volume, Internet Message Boards
Both authors are at the Faculty of Commerce and Business Administration, University of British Columbia,
2053 Main Mall, Vancouver BC V6T 1Z2, Canada. E-mail correspondence can be sent to the corresponding author
at murray.frank@commerce.ubc.ca. We would like to thank Richard Arnott, Elizabeth Demers, Richard Green,
Alan Kraus, John Ries, Jacob Sagi, an anonymous referee, the seminar audiences at UBC, the University of Toronto,
and at the 2002 American Finance Association annual meetings for helpful comments. We thank the SSHRC (501-
2001-0034) for financial support. The second author thanks the B.I. Ghert Family Foundation for financial support.
All errors are ours.
1
“Internet message boards have come of age. [...] even investment pros are watching the
message boards closely and profiting from it. With “posts” running in the millions, Internet
message boards have become an essential part of the savvy investor’s arsenal. [...]
Internet messages really do move markets, for better or worse.” (Weiss, 2000)
I Introduction
Many people are devoting a considerable amount of time and effort to create and to read
the messages posted on internet stock message boards. News stories report that the message
boards are having a significant impact on financial markets. The Securities Exchange Commission
has prosecuted people for internet messages. All this attention to internet stock messages
caused us to wonder whether these messages actually contain financially relevant information.
We consider three specific issues. Do the messages help predict returns? Is disagreement
among the messages associated with more trades? Do the messages help predict volatility?
The first issue is, do the messages predict subsequent stock returns? This is a natural first
question because a very high proportion of the messages contain explicit assertions that the
particular stock is either a good buy, or a bad buy. Of course, there are a great many previous
empirical studies showing how hard it is to predict stock returns. Thus it is not surprising that
the evidence rejects the hypothesis that on average the messages can predict stock returns.
The second issue is whether greater disagreement is associated with more trades. This
question was stimulated by reading the messages. At times the message boards reflect considerable
disagreement, while at other times much greater consensus is evident. What does
financial theory say about disagreement and trading volume?
Financial theory provides two distinct perspectives on disagreement. A traditional hypothesis
is that disagreement induces trading. Karpoff (1986), Harris and Raviv (1993) and
others have carried out related theoretical analysis of trading volume. An alternative perspective
is found in the ‘no-trade’ theorem of Milgrom and Stokey (1982). According to the ‘no
trade’ theorem, when one person considers trading with another person, each of them needs
to consider why the other person might be willing to trade at a particular price. In some
settings disagreement does not induce trading; it leads to a revision of market prices and of
beliefs.
The idea that greater disagreement is associated with more trades is an hypothesis about
what happens at a moment in time. We consider this hypothesis both in contemporaneous
regressions and in predictive regressions. Contemporaneously the hypothesis is supported.
However, greater disagreement today predicts fewer trades tomorrow. We also try conditioning
on a variety of other factors.
The third issue is whether the message boards help to predict volatility. A remarkable
range of sometimes quite odd things are said in the messages. This leads to the hypothesis that
perhaps the people posting the messages are a real world counterpart of the ‘noise treaders’
that are so often invoked in financial theory. In order to test this idea we need to define and to
model volatility. The literature provides a large number of approaches to volatility.
Many recent studies have employed realized volatility instead of focusing on the squared
residuals from a returns regression.1 Andersen, Bollerslev, Diebold and Ebens (2001) have
used this approach in a study of the firms in the Dow Jones Industrial Average. We consider
the importance of the message boards within a fractionally integrated realized volatility news
1Realized volatility follows from the work of French, Schwert and Stambaugh (1987) and Schwert (1990). It has
been given theoretical foundations by Andersen, Bollerslev, Diebold, and Labys (2001).
2
response function that follows their approach. We also consider volatility vector autoregression
that are related to Andersen, Bollerslev, Diebold and Labys (2002).
The GARCH class of volatility models remain popular. Recent studies such as Hansen and
Lunde (2001) and Engle and Patton (2001) show that it is hard to beat a GARCH (1,1) within
the class of GARCH models. However, there is some evidence of an asymmetric response
between positive and negative shocks, as in Glosten, Jagannathan and Runkle (1993). Accordingly
we have also considered the effect of the message boards within the context of GARCH,
EGARCH, and GJR models. To save space these results are left to the technical appendix.2
Volatility models are often estimated without exogenous variables. However, it is well
known that trading volume helps forecast volatility (see Jones, Kaul, and Lipson (1994) for
example). Glosten, Jagannathan and Runkle (1993) and Engle and Patton (2001) also fit models
that include the treasury bill rate as an exogenous factor. We found evidence supporting the
role of trading volume, but for our sample we did not find any evidence that the treasury bill
rate helped to forecast volatility. Thus we include trading volume as an added factor in our
volatility tests.
The results do support the idea that message posting helps to predict volatility. Perhaps
due to multicollinearity, adding trading volume does tend to reduce the impact of the number
of messages on market volatility. However, this reduction does not cause the message board
effect to vanish. Trading volume was the more important factor for predicting the market
volatility of some firms, while the messages are more important for predicting the market
volatility of other firms. Evidence for an effect of bullishness or disagreement on volatility is
weak.
The first study of internet stock message boards was Wysocki (1999). For the 50 firms
with the highest posting volume between January and August 1998, he reports that message
posting did forecast next day trading volume and next day abnormal stock returns. Using
a broader sample of firms, Wysocki (1999) also measured the cumulative message postings
on Yahoo! Finance to July 1, 1998 and studied the cross sectional differences between firms
in order to determine which firms had a large number of messages posted. The firms with
high message posting activity were characterized by: high market valuation relative to fundamentals;
high short seller activity; high trading volume; and high analyst following but low
institutional holdings.
Bagnoli, Beneish andWatts (1999) compared the First Call analyst earning forecasts to unofficial
“whispers.” The whispers were collected from a number of sources including Internet
web pages and news stories that reported the whisper forecasts. The analysts from First Call
tended to underestimate corporate earnings announcements, while the “whispers” tended to
be more accurate.
In a study of stocks in the Internet service sector, Tumarkin and Whitelaw (2001) found
that the messages did not predict industry adjusted returns or abnormal trading volume. Das
and Chen (2001) is devoted to the development of a new natural language algorithm to classify
stock messages. They illustrate its application on a selected sample of 9 firms during the
last quarter of 2000. They find that the stock messages reflect information rapidly but do not
forecast stock returns. Dewally (2000) collected stock recommendations from two newsgroups
(misc.invest.stocks and alt.invest.penny-stocks). He found that there was no predictive content
in the forecasts on these newsgroups. The recommended stocks typically had strong prior
performance.
Thus there are mixed claims regarding whether public information on the Internet can
2A technical appendix to this paper is available on the web as a PDF file at http://pacific.commerce.ubc.ca-
/antweiler/public/noise-1.pdf. The appendix contains additional discussions, results, and robustness checks.
3
predict subsequent stock returns. As far as we know our paper is the first to use the stock
message boards to consider whether differences of opinion in the messages are associated with
more trades. Similarly we are not aware of any studies that have examined the connection
between message posting and stock market volatility.
The rest of the paper is organized as follows. Section II discusses the messages and how
we extracted information from the texts. In section III we describe a number of the basic
features of the data. The predictability of stock returns is considered in section IV. Section
Vpresents the volatility results. Trading volume is considered in section VI. Both the effect
of disagreement on trading volume and the predictability of trading volume are studied. The
role of the Wall Street Journal is considered in section VII. We conclude in section VIII.
II Message Board Data and Classification
During the year 2000 Yahoo! Finance and Raging Bull provided two of the largest and most
prominent sets of message boards. The sample of stocks being studied are the 45 firms that
together made up the Dow Jones Industrial Average (DIA), and the Dow Jones Internet Commerce
Index (XLK). These firms were fairly large and well known.
Messages were downloaded from the Yahoo! Finance (YF) and Raging Bull (RB) message
boards using specialized software written by the authors. Downloaded messages were stored
in a simple plain-text database format, one file per day per company. Each message is uniquely
identified by the bulletin board code (YF or RB), the company’s ticker symbol, and the message
board sequence number. The file contents were then summarized in an index file which also
lists the date and time of posting, the message’s length in words, and the screen name of the
originator of the message.
To understand the nature of the postings it is helpful to look at examples. Figure (1) provides
two fairly typical examples of messages in the database format. Each message is dated
and timed to the minute, has a title, and has a text. The text very often contains a predicted
price change and at least some explanation for the prediction. Most of the explanations are
fairly short. The number of words in a message is most frequently between 20 and 50. Relatively
few messages have more than about 200 words. It is fairly rare for a message to have
more than 500 words. More than 40% of the messages are posted by people who post only a
single message.3 However, there are some people who are very active and account for more
than 50 messages each.
Our message boards data contains more than 1.5 million text messages – far too many to
interpret manually. In order to assess the content of the stock messages we employ well established
methods from computational linguistics. The oldest algorithm used to interpret text is
called Naive Bayes. We use this classic algorithm as our main case. Another algorithm called
Support Vector Machine has become very popular for use in many classification problems,
including text classification.4 In order to ensure robustness we carry out all tests using both
algorithms to measure the messages. Both algorithms are used to code the individual messages
as bullish, bearish, or neither. The two algorithms produce quite similar results and so
we only report the Naive Bayes results in the text.
3We only observe the chosen screen name rather than the author’s actual name. Therefore if one author posts
messages using more than one screen name we will count these as if they were separate authors.
4We discuss the Support Vector method in the technical appendix.
4
UBC Commerce professors part of first group to benefit from funding for research on the new economy
Two UBC Commerce professors received funding through the first round of research grants awarded under the Social Sciences and Humanities Research Council of Canada's (SSHRC) Initiative on the New Economy (INE).
Profs Murray Frank and Werner Antweiler received funding for their research project that looks at the impact of Internet stock message boards on North American Financial Markets.
"Financial Prices are fundamentally determined by the information that people use as the basis for their trading decisions," says Prof. Frank. "When that information changes, market prices change."
Between 1998 and 1999, Internet stock message boards emerged as a new channel to exchange financial information. Over the past two years, approximately one million messages about U.S. listed companies were posted on the Yahoo! Finance Message Boards.
How these messages affect stocks and other aspects of market behaviour, such as volatility will be examined. Profs Frank and Antweiler have already completed some work on a related topic, examining whether Internet stock messages contain financially relevant information. Is All That Talk Just Noise? The Information Content of Internet Stock Message Boards is available for downloading (PDF, 556K).
About Sauder School of Business
As one of the world's leading business faculties, Sauder School of Business represents the future of management thinking. The Faculty has more than 1,750 students in Bachelor's, Masters and PhD programs and boasts 23,000 alumni in 60 countries.
http://www.sauder.ubc.ca/news/releases/2002/may/20020515.cfm
"Using the screen name Dr_Analyst, Lorie also posted false and misleading messages about American Healthcare on Raging Bull, an Internet message board."
IN THE MATTER OF LUIS LORIE
On December 12, the Commission issued an Order Instituting Public
Administrative Proceedings and Notice of Hearing Pursuant to Section
15(b) of the Securities Exchange Act of 1934 (Exchange Act) against Luis
F. Lorie (Lorie). In the Order, the staff alleges that Lorie is
enjoined from future violations of the antifraud and registration
provisions of the securities laws and has pled guilty to criminal
charges resulting from his participation in a "pump and dump" scheme
that utilized the Internet to create and maintain a market for the
common stock of American Healthcare Providers, Inc. (American
Healthcare), a start-up company with virtually no business operations.
The Commission instituted this administrative proceeding after a
district court in the Southern District of New York found Lorie liable,
on May 29, 2002, for his role in the American Healthcare fraud, granted
the Commission's motion for a default judgment, and enjoined Lorie from
future violations of Sections 5(a), 5(c), and 17(a) of the Securities
Act of 1933 (Securities Act) and Section 10(b) of the Exchange Act and
Rule 10b-5 thereunder. See SEC v. American Healthcare Providers, Inc.,
et al., 01 cv 7649 (B.S.J.). In addition, on Nov. 27, 2002, Lorie pled
guilty to criminal securities fraud charges concerning the American
Healthcare fraud.
The complaint in the Commission's injunctive action against Lorie
alleged that Lorie participated in editing and drafting press releases
that he knew, or was reckless in not knowing, contained false
information about American Healthcare. Using the screen name
Dr_Analyst, Lorie also posted false and misleading messages about
American Healthcare on Raging Bull, an Internet message board. Despite
knowing, or recklessly disregarding, that his statements were false and
misleading, Lorie misled investors about American Healthcare. Between
March 1999 and June 15, 2000, American Healthcare issued at least
5,802,880 shares of unrestricted common stock in unregistered
transactions, increasing its float by 2633%. Of the 5.8 million
unrestricted shares issued, at least 3,393,111 shares were directly
issued to 6 companies related to Lorie or his father (the Lories).
Within days of American Healthcare issuing unrestricted shares to their
nominees, the Lories placed these shares into several securities trading
accounts in the United States and Canada, transferred shares between the
nominee companies, and sold them to the investing public. The Lories
received a total of at least $1,469,957.31 from the sale of shares of
American Healthcare.
In the Order, the Commission deems that it is in the public interest to
institute public administrative proceedings to determine whether the
allegations in the Order are true and what, if any, remedial sanctions,
including a penny stock bar, against Lorie are appropriate in the public
interest pursuant to Section 15(b) of the Exchange Act. The Commission
directed that an administrative law judge shall issue an initial
decision in this matter within 210 days from the date of service of the
Order Instituting Proceedings. (Rel. 34-48915; File No. 3-11355)
I think that was exactly what he was doing, as well as checking his fillings - and if CNN keeps keep showing that same extract over and over again, it'll lose the effect the propaganda people are aiming for - to show him being reduced to the level of an ordinary prisoner.
Saddam's much vaunted heroic martyr's "last stand" turned out to be for a US Army doctor doing a quick physical check. The subsequent ridicule is going to do more to stop the suicide bombers than anything else could.
Seeing Saddam being caught like a rat in hiding in a spider hole is going to do more to demoralize his supporters than anything else.
Now, watch as he "cooperates" by revealing where all the money is hidden world-wide, and turns in his own closest people to try to cut a deal that he will be tried for his crimes anywhere else but Iraq.
Saddam Hussein Captured Alive Near Tikrit
Dec 14, 8:12 AM (ET)
By HAMZA HENDAWI
(AP) Video image of captured former Iraqi leader Saddam Hussein displayed at a news conference in...
Full Image
BAGHDAD, Iraq (AP) - American forces captured a bearded Saddam Hussein as he hid in the cellar of a farmhouse near his hometown of Tikrit, ending one of the most intensive manhunts in history. The arrest, eight months after the fall of Baghdad, was carried out without a shot fired and was a huge victory for U.S. forces.
"Ladies and gentlemen, we got him," U.S. administrator L. Paul Bremer told a news conference. "The tyrant is a prisoner."
Saddam was captured Saturday at 8:30 p.m. in a specially prepared "spider hole" in the cellar in the town of Adwar, 10 miles from Tikrit, Lt Col. Ricardo Sanchez said. The hole was six to eight feet deep, camouflaged with bricks and dirt and supplied with an air vent to allow long periods inside.
In the capital, radio stations played celebratory music, residents fired small arms in the air and others drove through the streets, shouting, "They got Saddam! They got Saddam!"
At the news conference announcing his capture, U.S. forces aired a video showing a bearded Saddam being examined by a doctor holding his mouth open with a tongue depressor, apparently to get a DNA sample. Saddam was showing touching his beard during the exam.
Then a video was shown of Saddam after he was shaved.
Iraqi journalists in the audience stood, pointed and shouted "Death to Saddam!" and "Down with Saddam!"
"The captive has been talkative and is being cooperative," Sanchez said. Saddam was being held at an undisclosed location, and U.S. authorities have not yet determined whether to hand him over to the Iraqis for trial. Iraqi officials want him to stand trial before a war crimes tribunal created last week.
Ahmad Chalabi, a member of Iraq's Governing Council, said Sunday that Saddam will be put on trial.
"Saddam will stand a public trial so that the Iraqi people will know his crimes," said Chalabi told Al-Iraqiya, a Pentagon-funded TV station.
Two other Iraqis were also arrested in the raid and two AK-47 assault rifles, a pistol and $750,000 in $100 bills were seized, Sanchez said.
Sanchez described Saddam's demeanor during the arrest, saying he seemed "a tired man. Also I think a man resigned."
Forces from the 4th Infantry Division along with Special Forces captured Saddam, the U.S. military said. There were no shots fired or injuries in the raid, called "Operation Red Dawn," said Sanchez.
British Prime Minister Tony Blair welcomed Saddam's capture.
"This is very good news for the people of Iraq. It removes the shadow that has been hanging over them for too long of the nightmare of a return to the Saddam regime," he said in a statement released by his office.
In Baghdad, shop owners closed their doors, worried that all the shooting would make the streets unsafe.
"I'm very happy for the Iraqi people. Life is going to be safer now," said 35-year-old Yehya Hassan, a resident of Baghdad. "Now we can start a new beginning."
Earlier in the day, rumors of the capture sent people streaming into the streets of Kirkuk, a northern Iraqi city, firing guns in the air in celebration.
"We are celebrating like it's a wedding," said Kirkuk resident Mustapha Sheriff. "We are finally rid of that criminal."
"This is the joy of a lifetime," said Ali Al-Bashiri, another resident. "I am speaking on behalf of all the people that suffered under his rule."
In Tikrit, U.S. soldiers from the 4th Infantry Division, the unit that is responsible for security in Saddam's hometown, were smoking cigars after hearing the news of Saddam's capture.
Despite the celebration throughout Baghdad, many residents were skeptical.
"I heard the news, but I'll believe it when I see it," said Mohaned al-Hasaji, 33. "They need to show us that they really have him."
Ayet Bassem, 24, walked out of a shop with her 6-year-old son.
"Things will be better for my son," she said. "Everyone says everything will be better when Saddam is caught. My son now has a future."
"This success brings closure to the Iraqi people. We now have final resolution. Saddam Hussein will never return to a position of power from which he can punish, terrorize, intimidate and exploit the Iraqi people as the did for more than 35 years," Sanchez said.
After invading Iraq on March 20 and setting up their headquarters in Saddam's sprawling Republican Palace compound in Baghdad, U.S. troops launched a massive manhunt for the fugitive leader, placing a $25 million bounty on his head and sending thousands of soldiers to search for him.
Saddam's sons Qusai and Odai - each with a $15 million bounty on their heads - were killed July 22 in a four-hour gunbattle with U.S. troops in a hideout in the northern city of Mosul. The bounties were paid out to the man who owned the house where they were killed, residents said.
A Governing Council member, Jalal Talabani, told Iran's official news agency, IRNA, that Saddam's detention will bring stability to Iraq.
"With the arrest of Saddam, the source financing terrorists has been destroyed and terrorist attacks will come to an end. Now we can establish a durable stability and security in Iraq," Talabani was quoted as saying.
LOL..Wacko Jacko may be her twin, separated at birth.
Although jacko would probably have said "peeing"...
The "person" peering in the window was added later.
Remind you of Wacko Jacko?
Who could this psssibly be, advertizing her services on the internet?
From: VoirDire43@aol.com (VoirDire43@aol.com)
Subject: Re: Getting Work - good chances
View: Complete Thread (8 articles)
Original Format
Newsgroups: alt.private.investigator
Date: 1996/11/22
In article <01bbd26b$8f67d1a0$5a1356ce@craigpi.vip.best.com>,
"Craig Stewart" <craigpi@c5ltd.com> wrote:
>
> I have worked with "voirdire 43" off and on for almost 15 years. I highly
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>
> Craig Stewart
> CDS & Associates
> 601 Caqlifornia St. 21st FL.
> San Francisco Ca. 94108-2898
> PI 17086
> S.F.: 415-981-6630 x203
> East Bay: 510-337-1640
> 24 hr Fax: 510-337-0766
> ****************************************************************************
> ***************************
> Supporting the California Youth Soccer Association and Youth Sports across
> the Nation!
> ****************************************************************************
> ***************************
> craigpi@c5ltd.com
>
> voirdire43@aol.com wrote in article
> <19961114173601.MAA26400@ladder01.news.aol.com>...
> > And, if you need another good woman investigator, don't hesitate to
> > contact me for any needs within the Bay Area and Northern
> > California.........
> >
Craig,
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Voir Dire Investigative Services
405 14th Street, Suite 610
Oakland, California 94633
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Best to you,
Linda
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LOL...makes one wonder..
It looks very likely that they will -
Securities and Exchange Commission v. Wolfson, et al., 2:02 CV-1086 TC (D. Utah)
Litigation Release No. 18486 / December 3, 2003
Securities and Exchange Commission v. Wolfson, et al., 2:02 CV-1086 TC (D. Utah)
Robert Pozner, Former Trader at Glenn Michael Financial, Agrees to Fraud Injunction in SEC Market Manipulation Case
The Securities and Exchange Commission announced today that on November 25, 2003, the Honorable Tena Campbell, United States District Judge for the District of Utah, Central Division, entered a Judgment of Permanent Injunction as to Robert Pozner of Ridgewood, New Jersey. Pozner consented to entry of the Judgment.
The Judgment against Pozner enjoins him from future violations of the antifraud provisions of the securities laws (Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder). The Judgment also orders that the Court will retain jurisdiction to decide the appropriate amount, if any, of disgorgement, prejudgment interest and penalties against Pozner. The Judgment further states that in any motion or hearing to determine the appropriate amount of disgorgement or civil penalties, Pozner will not contest his liability under the foregoing securities laws.
The Commission's Complaint alleged that Pozner, then a trader at a brokerage firm called Glenn Michael Financial Corporation, engaged in a scheme with other defendants from July through November 2000 to manipulate the public trading market for stock issued by Freedom Surf, Inc. (See Litigation Release No. 17756, September 30, 2002). Freedom Surf was then a start-up company with offices in Huntington Beach, California. The Complaint alleged that certain defendants transferred Freedom Surf stock at no cost to defendant Allen Wolfson. Wolfson, Pozner and other defendants then participated in a scheme to artificially run up the price of Freedom Surf stock. The Complaint alleged that Pozner and others advanced the bid quotation in Freedom Surf stock without relation to genuine market demand or worth of the company. The Complaint alleged that in less than two months, Pozner, at Wolfson's direction, and without client orders, bid up the stock from $5 to $35. The stock manipulation scheme perpetrated by Pozner and others appeared to shut down when SEC staff began investigating in November 2000.
http://www.sec.gov/litigation/litreleases/lr18486.htm
LOL! "Shareholder harassment" is probably something she picked up from Pugs Dobry.
It must be contagious.
When you find a few spare brain cells think about how idiotic you appear.
The reason I am not posting on that board is due to shareholder harassment, which you are continuing on this board.
Cataldo "took over" CYPT as Executive Chairman in May 2002.
Mr. Cataldo took over the company as President in June of 2003.
He "took over" the board of directors at the same time.
SO, why are you posting on PCBM and not the CYPT board?
http://www.secinfo.com/dV5Ff.378z.htm#1stPage
On May 9, 2002, the Company entered into a letter agreement with the Cataldo Investment Group (“CIG”) whereby CIG agreed to commit an aggregate of $1,422,500 to the Company within ninety days from May 10, 2002. CIG is comprised of outside investors of which Mr. Cataldo has no affiliation or participation in this investment
At this time the Company has received approximately $265,000 of this commitment, which has been deposited in a special attorney escrow account. The Company has issued a $150,000 10% convertible promissory note to Townsbury Investments Limited, the investor in a prior investment that provided for an existing equity line of credit. This note is convertible into shares of the Company’s common stock at $0.05 per share and is due on the earlier of July 14, 2002 or the settlement date of the Company’s next draw down under the equity line. In conjunction with the issuance of this note, the Company repriced from $0.27 to $0.015 the 4.2 million share warrant issued pursuant to the equity line. The investor has exercised the warrant for 1 million shares and the Company has received $15,000 in proceeds. A further $100,000 has been made available by an advance on the second $425,000 debenture to be issued to Bristol Investment Fund. The monies made available from the convertible debentures are being used to fund the Company’s restart.
The Company also intends to issue 17,000,000 restricted shares of its Common Stock for a combination of cash and legal services. These shares will be issued at $0.015 per share and will be registered within ninety (90) days at no cost to CIG or its designees. The balance of the investment commitment will be provided to the Company within ninety (90) days of May 10, 2002, pursuant to a definitive agreement to be finalized. It was further agreed that CIG would raise an aggregate of $5,000,000 prior to May 10, 2003 on terms to be mutually agreed upon.
Additionally, the Company appointed Anthony J. Cataldo as Executive Chairman and further agreed to issue to Mr. Cataldo 1,966,666 stock options pursuant to an agreement that will be negotiated between Mr. Cataldo and the independent members of the Board of Directors. Mr. Cataldo was appointed to the Board replacing David E. Collins, who resigned as Chairman of the Board and from the Board of Directors.
The CIG investment was further conditioned upon a right granted to Mr. Cataldo on behalf CIG to appoint new directors which may constitute a majority of the Board of Directors within thirty days of May 10, 2002.
You overestimate Bruizzer's abilities...
her goldfish turns on the PC.
How is it possible to have the memory of a goldfish, yet still know how to turn on your computer?
Just who are you talking about. Bruizzer? It's certainly not you -
They knew the real person had a reputation and a business of their own. They trashed the reputation and the business.
Well, that eliminates you...
REAL investigators work for a STABLE of attorneys and organizations
IN WITNESS WHEREOF, the Client and Comdata, through their respective duly
authorized and acting representatives, have executed and delivered this
Agreement to be effective as of the date first set forth above.
COMDATA NETWORK, INC. Pinnacle Business Management. Inc.
-------------------------------------
d/b/a COMDATA CORPORATION(R) Printed or Typed Name of the Client
By: /s/ Bobby Monord By: /s/ Joseph N. Vallone
----------------------- --------------------------
Title: VP of Credit Title: Vice President
-------------------- -----------------------
http://www.secinfo.com/duvJ5.52uw.8.htm#1stPage
In November 1999, the company entered into a contract with Comdata Network, Inc. d/b/a Comdata Corporation {"Comdata"), a Maryland corporation. Comdata has developed, offers and operates a funds distribution service, which may be used by companies and employers to distribute wages, salaries or expense reimbursement funds to employees or persons entitled to such funds, by means of Comcheck eCash Card {MasterCard), provided the companies are approved for Comdata's service.
The Comdata agreement, entered into on November 11, 1999, was for the term of one year. Pinnacle has continued to renew the agreement on a month-to-month basis.
10QSB: PINNACLE BUSINESS MANAGEMENT INC
--------------------------------------------------------------------------------
8/20/2001 4:36:00 PM
(EDGAR Online via COMTEX) -- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Management's discussion is based on an analysis of the financial statements for the six months ended June 30, 2001 and the three months ended June 30, 2001. The figures are then compared to the same periods in 2000. This discussion should be read in conjunction with the company's audited financial statements for 2000 and 1999 which are set forth in the company's Form 10- KSB filed on April 17, 2001.
PAST AND FUTURE FINANCIAL CONDITION
Pinnacle is a holding company of Fast Paycheck Advance Inc., a Florida corporation ("Fast Paycheck") and Lo Castro & Associates, Inc., a Pennsylvania corporation, ("Lo Castro") , acquired on January 19, 2001. In addition, Pinnacle acquired Arnoni, Lo Castro & Associates, a Pennsylvania general partnership ("Arnoni"). Lo Castro and Arnoni are related entities under common control. The company's other wholly owned subsidiary, Fast Title Loans, Inc.,a Florida corporation ("Fast Title") became inactive in September 2000.
In March 2001, Pinnacle spun-off Summit Property Group, Inc., ("Summit"), a Nevada corporation and a wholly-owned subsidiary of Pinnacle. This subsidiary remained inactive and had no assets since its incorporation on December 27, 1997.
Management is optimistic that the company can recover from recent financial difficulties and continue the data processing services and payday advance services to individuals, as well as to grow the Lo Castro businesses to expand cash flow.
The company's new operations encompass three areas: (1) revenues through the traditional pay day lending; (2) revenue from processing payday loans for competitors and (3) continuation and expansion of the Lo Castro business.
First Component of Operations -
The first component of operations consists of revenues generated through the pay day lending from the company's former Fast Title locations in Florida. In November 1999, the company entered into a contract with Comdata Network, Inc. d/b/a Comdata Corporation {"Comdata"), a Maryland corporation. Comdata has developed, offers and operates a funds distribution service, which may be used by companies and employers to distribute wages, salaries or expense reimbursement funds to employees or persons entitled to such funds, by means of Comcheck eCash Card {MasterCard), provided the companies are approved for Comdata's service.
The Comdata agreement, entered into on November 11, 1999, was for the term of one year. Pinnacle has continued to renew the agreement on a month-to-month basis.
Under the agreement, Comdata provides Pinnacle with the ComCheck debit card that has access to the CIRRUS ATM Network and the MAESTRO POS Debit Network. The debit cards are issued by First American National Bank, who is a CIRRUS and MAESTRO member. MAESTRO is a distribution division of the MasterCard system. Comdata also provides the company's employees with initial training in the funds distribution by the means of the debit card, as well as with promotional material.
The debit cards provided by Comdata are used to advance funds to the customers. Instead of disbursing cash and requiring cash to be on hand in locations throughout the country, Pinnacle provides a debit card to its customers that is accepted at 1,000,000 plus locations. The debit card is placed on the MAESTRO system by Comdata.
The Comdata contract expired on November 11, 2000, but continues month-to-month. Before its expiration, Pinnacle entered into a contract with Lynk Systems, Inc. {"Lynk Systems"), by and through its CashLynk Master-Client Agreement signed on September 12, 2000. Both Lynk System and Comdata provide debit cards to the company. Lynk System contract is for the term of two years. Lynk System provides the same services as Comdata,
but it also provides additional services that customers can utilize with the debit card, such as ATM services, Fund Transfer Services, Long Distance Telephone Services, and POS Services that allow the cardholder to purchase goods and services at any retail or other establishment that displays the network logo that also appears on the back of the card. POS are Point-of-Service locations. The debit card issued by Lynk Systems is supported by the Star, Plus, Mac, Pulse, Interlink and NYCE network. These networks act exactly like the MAESTRO and CIRRUS networks that support the Comdata debit cards. The major advantage of the Lynk System is the increased swipe fee revenue from Lynk Systems. A swipe fee is a fee generated each time the debit card is used in an ATM or at a POS location. Pinnacle has the option to pick up additional services for its clients, but has not implemented any such programs. Pinnacle has plans to implement additional services as they become available from the Lynk System in the next 9 months.
Second Component of Operations
The second component of operational revenues consists of processing revenues generated from processing Pay Day advance loans for the company's competitors.
On September 24, 1999, the company signed an agreement to offer Fast PayCheck services through Mail Boxes Etc. USA, Inc. ("MBE") stores. MBE is a franchiser of retail outlets which provide a variety of postal, business and communication services to businesses and the general public. The contract allows Fast PayCheck to offer services through participating MBE retail outlets. MBE has over 3000 locations in the United States.
Through the MBE agreement, Fast PayCheck may offer its services in any participating MBE Centers. The decision to open a Fast PayCheck service in an existing MBE center is made by Pinnacle's management. Under the agreement, Pinnacle may commence business in any state, in which Pinnacle is licensed to conduct business, within the three year period. Pinnacle has to negotiate with each franchisee separately, and the franchisee must agree to offer Fast PayCheck services in their MBE Center.
The MBE contract carries an option to renew upon terms agreed to by MBE, Pinnacle and Fast PayCheck. However, MBE, a subsidiary of Office Products of America, Inc., has recently been sold to United Parcel Service. The reorganization of MBE's corporate structure does not affect or modify the terms of MBE's agreement with Pinnacle. The future of the MBE agreement, however, is uncertain at this time due to the fact that the new management of MBE may not include Pay Check services in their business model and may not renew the agreement before its expiration in September 2002.
Currently, Fast PayCheck services are offered in four corporate locations (former Fast Title stores) in the state of Florida and throughout 125 MBE locations in the state of Florida.
The company has been licensed in Florida, Louisiana, Utah, Missouri, North Carolina, Kentucky, Indiana, Idaho, and California, and has pending applications for licenses in 20 (twenty) additional states, as set forth in more detail in the company's Form 10-KSB, filed on April 17, 2001, and incorporated herein by reference.
Third Component of Operations -
The third component of operations is the recently acquired Lo Castro businesss. Pinnacle intends to continue Lo Castro's diversified operations conducted through Lo Castro's three divisions, All Pro Auto Mall, All Pro Daewoo, and All Pro Communications.
All Pro Auto Mall -
All Pro Auto Mall sells used passenger cars and light trucks in the Western Pennsylvania area out of its Auto Mall store in McMurray, Pennsylvania. The Auto Mall store, located on Route 19 South in Peters Township, has a showroom that accommodates up to seven vehicles. The Company has focused its marketing efforts on the sub-prime customer through its UUAC affiliation program. In a typical transaction, the subprime customer purchases a used vehicle that sells for less than $9,000. The customer is required to make a down payment, ranging from $500 to $2,000, and finances the balance with funding available through UUAC. Interest rates range in the area of 21%.
All Pro Auto Mall also offers a wide range of traditional third party financing and leasing options for customers not considered sub-prime. Occasionally, the Auto Mall also offers a limited selection of classic cars, sports cars, exotic cars, and motorcycles. These vehicles are financed through traditional financing arrangements with other lending institutions.
During the second quarter, Lo Castro and Associates, Inc. entered into a servicing agreement with Universal Underwriters Acceptance Corporation to carry sub prime paper in addition to existing financing arrangements.
All Pro Daewoo
All Pro Daewoo is an authorized dealer of Daewoo Motor America, Inc., and it sells new and used Daewoo motor vehicles. Daewoo Motor America, Inc. currently manufactures three Daewoo models for sale in the United States, all of which are available at All Pro Daewoo. The Daewoo models consist of the sub-compact Lanos, the mid-size Nubira, and the full-size Leganza. Daewoo motor vehicles are a high-value, low price-point vehicle with Manufacturer's Suggested Retail Prices ranging from $9,199 to $19,199, excluding taxes, title, and destination charges. Daewoo vehicles are sold for cash or financed through traditional third party sources and are not typically eligible for the sub prime program.
The All Pro Daewoo dealership has a full service parts department with eleven service bays and a customer service department. It has the ability to service any vehicle. It is also a fully licensed Safety Inspection and Emission Station for the Commonwealth of Pennsylvania, making servicing any vehicle convenient for the customer.
All Pro Communications
All Pro Communications is a full service Telecommunications company engaged in sales, the installation, and service of the following systems:
1. Digital Business Telephone Systems 2. Digital Voice Mail Systems 3. Automated Attendant Systems 4. Nurse Call Systems 5. Emergency Call Systems 6. Closed Circuit Television (CCTV) Surveillance Systems 7. Fire and Security Systems 8. Structured Cabling (voice, data, video, fiber optics) 9. Telephone Entry Systems
On May 24, 2000, All Pro entered into an agreement with NEC America, Inc. ("NECAM"), a New York corporation with a principal place of business located in Irving, Texas, to sell and distribute telecommunications products and to provide installation, repair, maintenance, training and related services in the territory designated in the agreement. The NECAM agreement and Product Appendices are incorporated by reference to the Company's Form 8-K filed with the Commission on February 5, 2001.
All Pro, as NECAM's Associate under the agreement with NEC America, Inc., has installed business telephone systems within the port configurations offered by NECAM. During the current calendar year, All Pro provided installation and service to the commercial industry, private business, government agencies, health care facilities and educational institutions throughout the Western Pennsylvania region.
All Pro Communications is led by a group of experienced telecommunication professionals specializing in the sales, design, installation and service of Business Communication Systems. All Pro employees include communications consultants, certified technicians, customer service representatives and administrative personnel. Senior management of All Pro will be comprised of the same team that has directed the growth of Lo Castro since its incorporation in 1997 and includes Vincent A. Lo Castro, Mark D. Jackson, and Frank J. Lo Castro. The current management brings to All Pro many years of combined experience in business management and telecommunications.
As a wireless agent, All Pro offers a wide range of products, including the latest digital multi-network and internet-ready wireless telephones manufactured by Nokia, Ericsson, and Motorola. The Company also assists the customer in selecting the best calling plan on which to activate service based on a review of their calling patterns (minutes used per month, long distance and roaming activity).
All Pro Communications is an authorized agent of AT&T Wireless Services in the Pittsburgh Metropolitan Statistical Area.
In April 2001, All Pro Communications entered into a one year Nonexclusive Dealer Agreement with Cricket Communication, Inc. d/b/a Cricket Wireless, Inc. ("Cricket"). Under this Agreement, All Pro Communications is permitted to act as a sales agent for the solicitation of wireless telephone service in the Pittsburgh and Butler, Pennsylvania, markets.
In May, 2001, All Pro Communications entered into a three-year Sales Agency Agreement with MCI WorldCom Wireless, Inc. ("MCIW"). Under this Agreement, All Pro Communications is permitted to act as a sales agent for the solicitation of wireless telephone service in the territory in which MCIW has legal and regulatory authority, which includes most major markets in the United States.
All three divisions operate out of the same facility, a three story building located at 3644 Washington Road, McMurray, Pennsylvania, 15317. The property is owned by Arnoni, Lo Castro & Associates ("Arnoni"), a Pennsylvania general partnership, which was acquired by Pinnacle in the Lo Castro Acquisition. Prior to the Lo Castro Acquisition, each of the selling shareholders assigned their respective interest in Arnoni to Lo Castro & Associates, Inc. The Assignment of Partnership Agreement has been filed with the Commission as Exhibit 17 to the company's Form 8-K/A filed on April 4, 2001, and incorporated herein by reference.
RESULTS OF OPERATIONS
-
TOTAL ASSETS. Total assets at June 30, 2001 are $13,483,228, compared to March 31, 2001 assets of $13,697,343, and compared to June 30,2000 assets of $1,395,914. The increase in the first two quarters of 2001 primarily represents the net assets of Lo Castro and Arnoni.
TOTAL LIABILITIES. Total liabilities are $12,147,057 at June 30, 2001, compared to $12,114,586 at March 31, 2001, and compared to $4,354,528 as of June 30, 2000. Total liabilities include accounts payable and accrued expenses, current portion of mortgage payable, the current portion of the long term debt, and demand note payable shareholders. Accounts payable decreased from $981,533 at March 31, 2001 to $520,386 at June 30, 2001. Accounts payable at June 30, 2000 were $ 446,341.
The long-term debt at June 30, 2001 is $7,507,313, a decrease from $7,839,783 at March 31, 2001. Long-term debt at June 30, 2000 is $1,013,636. The increase of long-term debt in 2001 reflects a promissory note in the amount of $6,693,465 payable to Vincent A. and Kim Lo Castro for the acquisition of the net assets of Lo Castro. The note is payable in quarterly installments commencing April 1, 2002 through and including January 1, 2007.
The company has a $100,000 note payable with an investor that expired May 14, 1999. The company has accrued interest at June 30, 2001 of $114,000 that is due.
REVENUES. Operating revenues have decreased in the second quarter over the first three months of operation in 2001. The decrease is from two sources. First there was a decrease in Consulting Revenues, which should completely disappear in future quarters. The second reason is the decreased automobile selling prices in the quarter, due to the transformation of the marketing and sales efforts from late model pre-owned business to less expensive models in the sub-prime (UUAC) business.
Revenues, however, are greatly increased for the first six months of 2001, compared to the same period 2000. At March 31, 2001 operating revenues were $2,948,435. At June 30, 2001 revenues for the three month period are $2,297,794. This compares to revenues for the three month period ending June 30,2000 of $7,002. Pinnacle realized revenues for the six month period ending June 30, 2001 of $5,246,229 compared to $69,683 for the same period 2000. Operating revenues are expected to remain constant or increase as a result of the Lo Castro acquisition.
COST OF SALES: Cost of sales for the six months ended June 30, 2001 is $3,525,734. There was no meaningful cost of sales during 2000. Cost of sales for the three month period ended June 30, 2001, however, is $1,462,587. The costs of sales are expected to increase in proportion to the operating revenues.
OPERATING EXPENSES. Operating expenses for the six months period ending June 30, 2001 are $3,636,667 compared to operating expenses of $990,750 for the same period 2000. Operating expenses are $828,473 for the three months ended June 30, 2001 compared to $450,038 for same period 2000. Operating expenses are $2,808,194 for the first quarter of 2001, ending March 31, 2001. Pinnacle's operating expenses continue to increase proportionately with increases in sales. The expenses include salaries, advertising, commissions and consulting fees relating to the Lo Castro acquisition. Management believes that the financial condition of the company will improve substantially by 2002.
NET LOSS. The company incurred net losses for the six months ending June 30, 2001 of $2,332,558, compared to a loss of $1,174,026 for the same period 2000. The company incurred net losses for the three months ended June 30, 2001 of $246,585 compared to a net loss for the same period 2000 of $593,462.
The company had a net loss of $2,085,973 for the three months ended March 31, 2001. Management expects the company to continue to improve with net operating income for the balance of the current year slightly better than the second quarter. It is worth noting that the company had a net operating profit of $6,734 for the three months ended June 30, 2001 as compared to a net operating loss of $443,036 for the three month period ended June 30, 2000.
CAPITAL EXPENDITURES. There was no material capital expenditures during the period reported.
Non-cancelable lease commitments run until 2003. The total amount due under the lease terms for 2001 is $34,212. The company is operating various Fast PayCheck's locations in Florida on a month to month basis.
The company has a mortgage payable note secured by the land and the building from which Lo Castro operates. The total amount due under the mortgage note is $1,154,546 at June 30, 2001. The Lender has called the Mortgage, but is currently accepting payments according to the original terms of the loan and it is paid current both as to principal and interest.
LIQUIDITY
Maintaining sufficient liquidity is a material challenge to management at the present time. As the financial statements reflect, the company incurred net losses for the six months ended June 30,2001 and 2000. In addition, a mortgagee has made a demand for the mortgage payable which is secured by the land and the building from which Lo Castro operates. Furthermore, Lo Castro was informed by Promistar Bank to seek other alternative financing for its floor plan financing of new Daewoo vehicles. Management is negotiating and seeking alternatives to meet their obligations.
(c) 1995-2001 Cybernet Data Systems, Inc. All Rights Reserved
Received by Edgar Online Aug 20, 2001
CIK Code: 0001055037
Accession Number: 0001015402-01-502478
http://www.pcbm.com/press/010820.html
Comdata settles suit for $49 million
May 22, 2001
Comdata Network Inc., and its parent company, Ceridian Corp. (NYSE: CEN), agreed to settle with Flying J and NCR litigation originally brought against Comdata by Flying J Inc. in July 1996 and by NCR Corp., who intervened in September 1999.
Admitting no wrongdoing, Brentwood-based Comdata paid $49 million and will allow Flying J's TCH-branded fleet cards to be accepted on Comdata's Trendar point-of-sales devices. Additionally, Comdata's Comchek cards will be accepted for transaction processing over the ROSS point-of-sales system at non-Flying J-owned locations. The settlement will not affect Ceridian Corp.'s ongoing operating income.
http://www.bizjournals.com/nashville/stories/2001/05/21/daily12.html
Why?
Consider this to be proper notice.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=15870644
You really need some stronger medications, and do not do any "PI" work while you are taking medication.
By: dayticker $$$$
Reply To: 400451 by janice456 $$$$ Wednesday, 30 May 2001 at 10:14 AM EDT
Post #400464 of 400618
janice, you have opened the door...
Mr. kinkead is an attorney and what he is undertaking is quite legal. But I shall alert him as to your post and aid him in any way I can to prosecute you. So please, I am eager for another irresponsible response and libelous comment...any others here who may wish to give any statements let me know since I am meeting with mr. kinkead this afternoon as he passes through dfw on hi way to d.c.
http://ragingbull.lycos.com/mboard/boards.cgi?board=PCBM&read=400464
Braindeath in progress? You have to be the stupidest 'PI' around.
Why are you avoiding CYPT, Bruizzer?
Your stupidity continues to boggle the mind. Do you ever Get It?
Your inability to understand that no one is interested in your babble is stultifying.
LOL..yes I know who you mean. I notice they both have some things in common - making threats, fallacious logic, and mind-numbing irrelevant non sequiturs...
Well, an alias used on other message boards such as Yahoo, was bruzzones2000, which leads me to believe that bruizzer and spouse took turns at posting.
If you were not such a dimwit, you'd think before you get yourself into any more discussions that you're not intellectually equipped for, and I mean that in the nicest possible way.
We only have YOUR assessment of your abilities -don't we? Your abysmal failure to grasp simple facts, and to understand what you are told, is hardly an affirmation that you are qualified for anything.
Smarten up, at least to the point where you realize just how incredibly stupid you appear
Further, she has compared her level of expertise and ability, publicly, to mine and has made public comments about my ability to perform my work without actual knowledge of me or my abilities. I believe this to be defamation.
Nonetheless, I have left messages for her attorneys and I am certain it will be resolved with some legal intervention and her CVs that give her the expertise to determine the quality of work a licensed investigator performs.
Thanks,
Linda Bruzzone
That's THREE - and you didn't use it for CYPT - why?
Isn't CYPT your "passion" anymore?