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You would think money laundering accusations would have made it but...
Cracking me up bro... cracking me up.
No. I think it has been shown several times that their numbers are bogus. There was even a little SEC investigation due to that fact. SPNG was not able to validate those numbers so here you sit on the greys.
From the Motley Fool Article on Spongetech:
But to a certain sort of capital markets observer, Spongetech is something else, not seen in a long while: a full-bore pump-and-dump scheme that will, when all is said and done, likely have harvested the wallets of thousands of penny-stock speculators and earnest individual investors who thought they had found the proverbial "next thing." It may not be the worst of such schemes. Unlike most pump-and-dumps, in which a few in-the-know sharpies drive a stock’s price to the moon and then sell it down to the basement, Spongetech has an actual product. Whatever is left of this company in the end, there will be something that someone—presumably the legion of bucket-haters among the do-it-yourself set—can dust off and sell in the market.
Still, the Securities and Exchange Commission didn’t initiate a formal investigation of the company and its management last week for nothing.
The company’s filings lead the skeptical reader to some pretty clear conclusions. The first is that Spongetech exists primarily to sell stock, and pretty much everything else comes second. At one point in early spring the company had more than 1.2 billion shares outstanding. Late Friday, as the pump collapsed, it had increased the authorized share count to 3 billion. By way of comparison, in the spring, the company—with reported sales of about $5 million a year—had roughly the same amount of shares outstanding as eBay (EBAY); with 3 billion shares issued, they would have a slightly larger float than Procter & Gamble (PG).
In short, Spongetech uses the capital markets as a sort of ATM, selling stock and raising cash as the next sponsorship deal is struck. This is not illegal or even really unethical, but neither is it a terribly good idea. It works as a strategy as long as the stock’s price goes up, because the minute it stops accelerating, the shareholder is stuck under a mountain of stock certificates, partnered up with a management that appears quite willing to keep selling all the way down.
To keep the troops rallied, or, more accurately, to keep a new stream of suckers lined up, Spongetech went to the Internet stock promoters whose “investor relations” work churns out a steady stream of dubious e-mails and faxes promising trading riches to the inept, clueless, and the delusional.
They came up with some doozies.
There was the multiply SEC-sanctioned Larry Isen, a partner in the TGR Group LLC, which touted Spongetech stock in return for $30,000 in cash and 750,000 restricted shares. In an Email, Isen said he was only a minority partner in TGR with a small stake in the company and does not recall if he economically benefitted from Spongetech in any fashion. He said he wrote about the company purely out of interest in its prospects. In addition to the five or so other promoters, there was the king of SEC-flouting touts, Jonathan Lebed, whose fee of 1,250,000 free-trading shares was footed by an investor named Doug Furth. Lebed did not respond to e-mailed questions.
Furth is no ordinary investor, however. The Solon, Ohio-based Furth is the owner, via his Signature Equity Fund, of 41 million shares or 5.1 percent of the company, as of last November. An activist of sorts, Furth is a mainstay of the Yahoo Finance Spongetech investor message boards, where, as he admitted to me, he posts as “Alfie31555.” Furth insists that he disclosed his ownership stake on the Yahoo forum. A verbal bomb-thrower of the highest order, Alfie31555 brooks no criticism of Spongetech and has saved his bitterest vitriol for short-sellers and the reporters he sees as being used by them.
For example, Furst’s ire was aroused on Sept. 22, when the New York Post reported that a former lawyer of Spongetech had written a letter to the SEC claiming that his signature was forged on dozens of corporate documents he had not written nor had even seen. In a post on Sept. 23 at 10:48 p.m., Furth described Post reporter Kaja Whitehouse as “Nothing more than a paid whore for the shorts” and described her reporting as “giving life to their skunkworks as their puppet.” Presumably Furth was no happier with Whitehouse’s subsequent article exposing the fact that five of Spongetech’s six largest customers are impossible......, with addresses and phone numbers that appear to be fake. To top it off, Whitehouse discovered that a Web hosting service that specialized in concealing contact information created Web sites for three of the six customers on the same day three weeks ago.
Furth, who, ironically, is the general partner of a fund seeking to finance clean and wholesome family movie ......, declined comment on why he hired Lebed. He said his remarks on Whitehouse “speak for themselves” and maintains that he “has a hunch short-sellers are paying her off.” He said he was “exercising his constitutional rights to free speech” with respect to Spongetech and its prospects, and remains a proud owner of its stock. Whitehouse declined comment on Furth or his remarks.
Furth may want to save some of his vitriol for the courtroom, where he has a few legal entanglements of his own. He declined comment on the legal proceedings.
Another thing that becomes clear is that Spongetech’s financials are head-scratchingly implausible. Five customers who no one seems to be able to definitively locate comprise the majority of Spongetech’s sales which, according to the company, are slated to come in around $50 million for this year, with an estimated $11 million profit. Not bad considering that last year the company did $5.63 million in sales and $1.24 million in profit. This year’s totals are estimated, it should be noted, because their auditors resigned under a cloud of accounting sanctions, which will delay the release of Spongetech’s annual report. The new auditors also have had some scrutiny from accounting regulators, although Deloitte & Touche is slated to take over after the current annual report is released. (DELOITTE HAS SINCE ISSUED A LETTER STATING THAT THEY REFUSE TO WORK FOR SPONGETECH!)
The first problem the skeptical investor should have is the explosive trajectory of revenue growth. Sales grew almost nine-fold without any meaningful sales from Wal-Mart (WMT), Target (TGT), AutoZone (AZO), and Duane Reade (Spongetech does sell products on CVS.com, but they are discounted 50 percent). Direct sales, at least as of the 2008 annual report, weren’t so hot either, with 2,400 kits being sold for just under $38,000 over the previous four years. Without the Western hemisphere’s largest mass-market retailers, and little in the way of direct-to-consumer sales, how does the company accomplish this growth?
The second problem is that Spongetech is not converting any of this unprecedented sales growth to cash. As the order flow now would appear to be in the millions of units, and without any bank or debt financing in place, it’s not easy to see how it can afford to make and ship so many sponges.
For the nine months ending on Feb.29, the company booked $4.9 million in net income yet used $170,000 in cash, leaving it with a paltry $34,570 in the till.
The culprit for Spongetech’s weak cash position is the $14 million in accounts receivable balance as of the last quarterly report, but this misses the broader point: Even with so many sales being done overseas — the five customers who cannot be tracked down are all based abroad—some of this balance should be paid out and converted to cash. But it’s not: For the six months ending in November 2008 (the company is on a May 31 fiscal year), the accounts receivable balance was more than $10.8 million.
If someone really is buying all of these sponges abroad—despite a marketing effort that is 100 percent focused on the American consumer—the company is stretching out their payment cycle way past the standard 30-day, or even 90-day, cycle. Spongetech is not General Dynamics (GD) or Intel (INTC), so it can’t access overnight funding markets when its customers' checks are caught in the mail.
I called and e-mailed the company and its public relations firms—Lippert Heilshorn, which resigned from the account late last week, and the Dilenschneider Group—and heard back only from Dilenschneider’s Andrew Osterland. Via e-mail, he said Spongetech’s lawyers retained his firm only to help with one press release and to address the concerns raised in the New York Post stories. An e-mail was also sent to Steven Moskowitz, the company’s CFO, but no substantive reply has been received.
So, since I live near Spongetech CEO Michael Metter, I stopped by his lovely Greenwich, Conn. house on Saturday afternoon for an impromptu chat. A gruff, bald fiftysomething man came to the door and insisted that Michael Metter was not home. When I showed him a picture of Michael Metter I had printed from the Internet and pointed out that he looked almost identical, he became irritated. He refused to answer questions about the SEC investigation, the Post articles, or Michael Metter’s background as the head of a penny-stock ......, insisting that “Metter is not going to do any interviews.”
When I noted that he sure knew a lot about Michael Metter and his thinking, he walked away.
As I left, I knocked on his window and said, “Hey, Mike, can I leave my contact info?”
He turned around and said, “Sure.” I’m still waiting to hear back."
Seems INCL is still going great. TRT's buddy is getting frustrated with the board I think.
http://investorshub.advfn.com/boards/board.aspx?board_id=7935
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=42785808
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=42768612
I dunno. Seems to be a bunch of smacktards willing to pay that. I DON'T GET IT? Whatever.
My mother-in-law get an account?
Oh well, the company would not ease up on the dilution. I let em all go @ 28. Was hoping they would ease up but greed knows no bounds. A green trade is a green trade. Hopefully all the folks in there won't hang on too long.
OMG.... FFGO still around? LOL. I guess V will not let it die.
ooooops. dont tell meatloaf.
I know... who the hell is buying this??? I hope they can find a buyer when the time comes.
I was thinking of throwing you a release party but it is becoming so common place that it would be like celebrating a Tuesday.
They are going to break their arms patting themselves on the back. I hope they are also telling folks when to sell in order to lock in them there profits.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=42743411
Posted by: Mingy Date: Tuesday, October 20, 2009 3:30:05 PM
In reply to: None Post # of 93490 [Send a link via email]
why was I suspended? It seems that I was the only person taking the bullish side of spongetech, and now i'm suspended?
Private Reply | Keep | Public Reply | View Replies (1) | Mark as Last Read
Posted by: Churak Date: Tuesday, October 20, 2009 3:33:01 PM
In reply to: Mingy who wrote msg# 93487 Post # of 93490 [Send a link via email]
that explains it...
Private Reply | Keep | Public Reply | View Replies (1) | Mark as Last Read
Posted by: Mingy Date: Tuesday, October 20, 2009 3:37:03 PM
In reply to: Churak who wrote msg# 93488 Post # of 93490 [Send a link via email]
yeah, it does doesn't it. Is the short interest so large in spongetech that they only let one side of the story to be told? To shake out retail?
Private Reply | Keep | Public Reply | View Replies (1) | Mark as Last Read
Posted by: Churak Date: Tuesday, October 20, 2009 3:38:04 PM
In reply to: Mingy who wrote msg# 93489 Post # of 93490 [Send a link via email]
don't you have Shorty right where you want him? I mean, after all, that 10 day suspension must have scared the crap out of him.
Yeah, I have watched them all. The Xbox (I think) was the original so all props go to that guy.
I think it is unlimited for like an hour after the market closes. He just posts to make people crazy and laughs himself to sleep. No one is that delusional...
I think I can squeeze out another 70% tomorrow
I am so bad. I am sure someone can quote something about bulls and pigs... yada yada yada.
Oh no... no pump from me. I don't think it is just your common POS but dilution is rampant there. I am hovering over the sell button ready to pounce.
Wow, you are putting up PRs as facts?!? I do wish you luck with your "investment".
Not really. I do it just because I enjoy being correct. This was easy to spot (most are). If someone sells to lock in profit then life is good. If they ride it down to nothing because they are hard headed, so be it. Z4 figured it out and NO ONE defended this stock more than him.
No. I am willing to bet if I had been watching L2 I would not have pulled the trigger or I might have sold at some point. I was just watching the action and it really never softened. It should gap and I will ride some freebies. If it goes the other way I have plenty of cushion. Feels good to hit a penny every once in a while. FAS/FAZ has gotten boring and not very profitable lately.
Over the years, I am willing to bet all of us have been involved in something like this and saw the writing on the wall. I do not why you find it so hard to believe that we would want folks to take profit or cut loses for no other reason. We just don't want folks to get taken. It sucks. Quit defending the ones taking their money. The OS is bloated and no one knows what it is, they have been dumping paper, and if there is a large naked position or not it does not matter. SPNG is toast. Sorry about your luck.
Nice little hit... see if it gaps in the morning.
Here are todays volume leaders. Only one issue had traded more than SPNG and SPNG is on the greys. There are a poop load of shares out there. Oh, BTW Citi has over 11B shares outstanding...
Symbol Name Last Trade Change Volume Related Info
C CITIGROUP INC 4.56 3:04PM ET Down 0.03 (0.64%) 224,364,058 Chart, Profile, More
FNM FANNIE MAE 1.19 3:04PM ET Down 0.27 (18.49%) 173,746,858 Chart, Profile, More
CIT CIT GROUP INC (DEL) 1.22 3:04PM ET Up 0.10 (8.93%) 123,669,001 Chart, Profile, More
BAC BK OF AMERICA CP 17.26 3:04PM ET 0.00 (0.00%) 115,353,719 Chart, Profile, More
SPY S&P DEP RECEIPTS 110.02 3:04PM ET Up 1.13 (1.04%) 102,243,489 Chart, Profile, More
FRE FREDDIE MAC 1.37 3:04PM ET Down 0.35 (20.34%) 86,103,743 Chart, Profile, More
GE GEN ELECTRIC CO 15.93 3:04PM ET Down 0.15 (0.93%) 75,996,311 Chart, Profile, More
PFE PFIZER INC 18.05 3:04PM ET Up 0.28 (1.58%) 73,645,418 Chart, Profile, More
XLF FINANCIAL SEL SPDR 15.31 3:04PM ET Up 0.09 (0.59%) 63,778,139 Chart, Profile, More
ETFC E*TRADE Financial Corporation 1.74 3:04PM ET Down 0.01 (0.57%) 55,661,482 Chart, Profile, More
Ha! yeah. Let's see how that works out in the coming days
What goes up must come down. (if it is a scam...)
I have a hunch that seller has plenty of shares... LOL
Ummmm... it was suspended. The SEC can only suspend for 10 days.
No one knows your gender...
BWAAHAHAHAAHAHHA!
hahaha... if everyone who received nasty PMs from that guy... well... there would be a shit load. Dude is such a tool.
(Stupid bird flying around)
If you feel the need to say something to me, this is the forum. So speak now or STFU Wicks.
2? Might want to rethink your trading strategy.
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