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The problem with the analyst community is that it's very dangerous for an individual analyst to diverge much from the consensus. They all look at the same numbers, talk to each other, and arrive at similar conclusions regarding the stocks they follow. There is very little reward, and lots of risk, for an analyst that goes off the reservation. When Chanos started pointing out the cracks in Enron's foundation, it took a while for the mainstream analyst community to grasp his criticisms. Despite several high-profile appearances regarding Lehman, the analyst community is only now beginning to appreciate what Einhorn has been saying.
Analysts who become adept at turning over rocks and finding nasty bugs don't stick around the wirehouses for long. They get snapped up by the hedge fund community or go on to open their own private management shops.
Indeed, he is an interesting guy.
He learned an expensive lesson from his involvement with New Century and applied it to Lehman.
(Note: I do not expect Lehman to go the way of New Century... though I think you can count on plenty of shareholder lawsuits in the coming days.)
Often it's the short sellers that are the source of the information. Take Enron, since it's been a recent topic here. Chanos took his short position in the stock once he realized their financials were deeply flawed. He ended up being the point-man when it came to describing to the general public what was taking place at Enron.
Chanos wasn't tipped. He was the one who ultimately tipped the rest of the world as to what was wrong with Enron.
We're seeing that process repeated right now with David Einhorn and Lehman Brothers.
As a general rule, short sellers tend to be more savvy than long-only investors. When we uncover stuff, we're frequently the ones providing analysts with the information they need to do a more thorough assessment of the stocks they follow. The analysts don't tip us; we tip the analysts.
ATTN: Admin
Please unban h24ever. We've communicated. He's cool; I'm cool. He just needed to let off a little steam.
Ah, yes, of course. It's all my fault.
I don't begrudge h24 his emotions, and that was clearly nothing more than an emotional, spur of the moment outburst on his part. If anything, h24's behavior demonstrates how thoroughly cretins like Faulk, Patch, Burrell, et. al. have executed the "naked short seller" scam.
h24...
With regard to your private message, while entertaining, your hostility is incredibly misdirected. (Sorry, I'm still on a free account and free accounts can't reply to private messages... and besides, just what kind of a response would you expect?)
It was not short selling of any flavor, "naked" or "covered", that wrecked Enron. Enron was wrecked by the guys who were running it. Short selling was only profitable because some investors were able to recognize the degradation of their condition long before they had to file for bankruptcy.
There are plenty of resources online where you can learn what really happened at Enron. Or, if you're so inclined, you can find an old copy of "Enron: The Smartest Guys in the Room" by Bethany McLean and Peter Elkind.
Did you ever read any of Enron's pre-bankruptcy 10-Q's or 10-K's?
Again, it is not the SEC's job to track the amount of stock being issued by a company. Nor is it their job to ensure that every transfer of stock is legal AS IT takes place.
None of the stock that was issued was "illegally" issued. Some of it was illegally transferred, but that's an altogether different issue. It's an important distinction from a regulatory perspective, even if it doesn't make a lot of sense to you.
Furthermore, none of the stock issuance has any bearing on what CMKM Diamonds was. They were never an enterprise that was operated with an intent to generate profit for her shareholders.
Because they were non-compliant with their filing requirements.
Why would you invest any money at all in a company that wasn't fulfilling their regulatory filing requirements?
A little more perspective on the numbers...
There are approximately 110 million households in the U.S. right now, give or take a million or so. Roughly 50% of the households in the U.S. have some form of equity ownership in one or more publicly traded companies here in the U.S.
Certain parties have gone to great lengths to tout the "strength" of a shareholder base that's 40,000 strong... never mind that most of those 40,000 can't find their asses with both hands. Those 40,000 investors represent less than 0.1% of the active investing public. And they got suckered by one of the most blatant stock scams the world has ever seen.
So why should anyone in authority listen to them?
It really wouldn't be such a bad thing for the markets if people who didn't understand how to invest stopped wasting their money on stocks where the underlying companies do nothing but squander their shareholders' equity on exorbitant, unjustifiable executive compensation.
It's not the job of the SEC to stop dopes from buying junk like CMKM Diamonds, Universal Express, or Overstock.com. It's the SEC's job to ensure that these companies are providing you with the necessary information to make your own decision about whether these stocks represent a good investment.
If you make the wrong decision, the fault lies with you and you alone.
What I find most astounding is the idea that anyone in authority should initiate any kind of a reform based upon the rants of people who get ripped off in a pump'n'dump scam like CMKM Diamonds or any of these other nasty, pink-sheet beauties.
The markets, as a whole, aren't going to collapse. In fact, the foundation for a decent, broad-market recovery is now in place. You'll still see some volatility here and there, but three years from now people will look back on this time as an excellent buying opportunity.
Just don't buy garbage if you decide to come along for the ride.
I would expect a company called "Cougar Minerals" to have the stock symbol "MILF".
It's slowly dawning on a lot of his supporters that Altomare's ripped them off.
Maybe he's safer being in the Can.
Not really great for Taser.
Christian and O'Quinn have tried this same stunt on numerous occasions, never with any success. (Taser, itself, is not a party to the suit. The plaintiffs are limited to certain, eligible shareholders.)
Their handling of the Nanopierce case they pursued was especially entertaining. Christian's services were retained with company stock which, upon the spike in their price upon the announcement of the suit, he dumped.
You gotta love their game...
Unfortunately, service and selection alone will not create a profitable enterprise.
I know their management wants people to believe they're another Amazon. One look at their financials demonstrates conclusively that they are not. Even back in their old, money-losing days, Amazon always had much healthier gross margins. Overstock has at least improved their margins somewhat by shifting from a "direct" to "fulfillment" retailing model, but slight improvement to their gross margins has not been enough to cover their overhead to say anything of actually generating a profit.
As for Buy.com, that is a comparison that you have to hope Overstock.com never emulates. They were taken private for around 17 cents a share years ago after most people figured out this retailing model can't work.
Faulk has never been someone who would let the truth stand in his way. So he creates his very own... "Faulking truth".
Nah, you haven't missed anything.
Overstock's long-term prospects of becoming a profitable e-tailer are non-existent. If you can manage to make some money trading these pump'n'dump spikes, have at it. Otherwise, you're just throwing your money away.
The shake-down continues.
Though I doubt Faulk will manage to pinch the poor bagholders for as much as Fizzle wrangled out of them.
I'm sure you'll get another opportunity to buy at $9... probably even lower, if you're willing to wait.
How many suckers do you think will buy Taser on this news.
Enough to make me consider shorting it.
It makes me wonder what kind of a bogus, paper-mill law school would give that idiot a J.D.
Then again, I've wondered the exact same thing about Fizzle...
You might also want to look into the peculiar timing of the Global Links pump'n'dump and a "sympathetic" piece written by Faulk.
It was back in the Spring of 2005.
At the end of my first complete day, smoke-free, I was edgy but I already felt like my breathing was easier.
After about a week, I developed a cough that, forgive the visual, produced a lot of junk that had accumulated in my lungs over the years. As I recall, that lasted for another couple weeks. (I quit some time ago.)
Once I got all that junk out of my chest, I felt like a whole new person. I still have occasional dreams where I'm smoking again. When I wake up, I have to think hard about whether or not I ever really quit. But quitting was one of the smartest things I ever did.
Drink lots of water.
Seriously, it'll help.
As for meeting a basher, what do you think that would accomplish?
If it's that important to you to dispose of them, and the tax write-off is large enough, you could probably find a firm that will let you do a courtesy trade. (They formally buy all the stock from you for a dollar.)
However, these courtesy trades are usually only done for clients of full service firms that expect you to do a considerable amount of business through them. Seeking a courtesy trade to close out a CMKM Diamonds position isn't exactly the way you want to introduce yourself to a new broker.
I doubt they have much of a listenership any more, but the address list they've accumulated of gulliblers who sent their certificates to the Task Farce probably has some value.
When you come to accept Fizzle's role as an enabler, you'll stop wondering why.
Fizzle already grabbed the moola.
I vaguely remember when Faulk got caught up with CMKM Diamonds, because it seemed to fit his misinformed world-view as to what was taking place with "naked short selling". There was a time where I thought he might only be naive. However, after seeing his involvement in the Global Links scam, his embrace of Richard Altomare, and TOGI's partnership with CFRN with Reeves' participation in a number of well-known pump'n'dump rackets, I've become convinced that Faulk is not just naive, but downright crooked, too.
Faulk has done himself a real disservice by putting off this book for so long. His potential audience has shrunk drastically over the past two years.
I'm sure he'll learn from that mistake when his next grift project comes along.
Then again, maybe he won't. I continue to be astonished by how obtuse that boy can be.
Yeah, everyone talks about how sensational LeBron James has been this spring.
I say, let's see him do it on some skates.
No, "people in the know" are definitely not buying Overstock.com. That's an ongoing gag that Skippy and a number of his associates play every once in a while on a fresh batch of gulliblers who aren't privy to his past episodes of managerial misconduct.
This latest pump'n'dump of Overstock.com centers on the perception that their revenue growth has kicked in again. (You will recall that their annual revenues plateaued in 2005 and have declined ever since.) Skippy's team pulled a quarter to quarter comparison that, superficially, looks very attractive and got a number of people excited about Overstock.com's prospects.
Unfortunately, the quarter to quarter comparison he made used non-GAAP numbers in one instance and GAAP-compliant numbers in the next. It will take a while for gullible Overstock.com investors to grasp this latest instance of managerial misbehavior, but "people in the know" are accustomed to Skippy pulling these kinds of stunts.
He's done it too many times in the past.
Overstock.com has been subjected to a number of pump'n'dumps over the past several years including a run into the $70's in late 2004 and a run that nearly took it back to $40 last fall.
But like all pump'n'dumps, they unwind horribly with lots of bagholders stuck wondering who to blame for their losses.
It won't be any different this time.
Because he can get gulliblers to buy into his never ending string of secondaries.
Now you're being deliberately obtuse.
Substantially all retailing is done at a gross profit. Even Skippy, the most incompetent CEO the retailing world has ever seen, generates a gross profit every quarter. And if it weren't for the burdensome little problem of SGA, that gross profit would indeed be a nice thing.
But you can't run a retailer without SGA and Skippy always wipes out what little gross profit he generates with obscene levels of SGA.
And that growth story?
Guess again.
Both the '05 to '06 and the '06 to '07 comparisons are negative. Overstock.com plateaued in 2005. And during that time, the losses continued to mushroom.
That's not spin. That is cold, hard fact.
Why wait?
You can see, first-hand, what Skippy has done to Overstock.com in any of his recent 10-K's or 10-Q's.
I think you're right about Stoecklein being one of the first to suggest an interplead. Then I would bet that Casavant figured he could string everyone along even longer if he appointed a dolt like Kevin West to take over.
As for there being a window where the Entourage shares could have been distributed, no, I don't believe that was ever a possibility. Even if a creditor hasn't filed a formal court claim against the assets of a corporation, an officer of that corporation can't distribute the sole remaining assets of the corporation to the equity holders when he/she knows, or can reasonably be expected to know, that creditors exist whose claims have not been paid.
That's where the unlawful/fraudulent conveyance comes in.
It's not really a case that should ever go to trial, but they did a very good job jurisdiction-shopping before they filed. In almost any other jurisdiction, this frivolous suit would have been summarily dismissed.
Nobody has made anything up about Skippy. He did lie about his working capital situation in January 2006. He did compare non-GAAP 2007 reports to GAAP-compliant reports during a recent conference calls. And he has lied in the past about Overstock.com being cash flow positive when, in fact, it was not.
Skippy is going to get hammered if this thing goes to trial. But I suspect that the real intent was never to win anything in a trial. This has all the markings of so many suits we've seen in the past where incompetent managements seek to distract investors from their inept and/or corrupt behavior.
As much as it pains me to defend Fizzle, you can't blame him for the Entourage shares never being distributed to the CMKM Diamonds shareholders.
There is no legal way for a third party (in this case, Entourage) to contractually disenfranchise the creditors of a corporation from whom an asset has been acquired. It's not Fizzle's fault Entourage pulled this stunt... however, he SHOULD have quickly recognized the legal problem with the Entourage agreement and communicated it to the gulliblers.