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Yes, and someone is buying 10,000,000+ shares per day...and driving the price up...very odd...
I don't consider this investing, I consider it gambling. Investing is when you buy Microsoft and figure it will go up 5-10%/year including dividends. That was never the case here. Like poker, we were all hoping to get a full house, or perhaps more accurately, to draw to an inside straight.
I still have 10,000 shares. Bought them for next to nothing long ago (for about the cost of a good dinner for my family). Of course, I should have sold at $0.77, or $0.50, or $0.15. So it goes. It's play money, as far as I'm concerned. If I play blackjack in Vegas, that amount can be gone in an hour or two. Here, I've had over a year's worth of amusement.
Could be. But when the entire market tanks, and PHOT is up, it may be worth thinking about. Personally, I'm always pleased when any of my investments increases 15% in one day. As PHOT did today.
You are too optimistic. I have some of mine offered at .50, waiting for the fat finger trying to buy at .05...
The shares sold by Sterling, as has long been disclosed, were sold by his estranged wife, not him. Sterling has been a net buyer of PHOT for the past year.
The aspect of the SEC suspension the was due to misleading financial information was because PHOT valued stock distributions at two cents a share at a time when the stock had a market price of fifty cents (or more) per share. That does not constitute fraud, but is a good reason to terminate the CFO, which they did. I've already put money on Sterling not facing any legal action, and am more than willing to double down on that.
With a market value in excess of $50 million, there are few (if any) companies in the sector that could buy out PHOT even at their current value, let alone at a premium, which is more normal. Whether they survive is an open question. I bought my stock over a year ago for next to nothing. I consider it to be an investment in the same way playing blackjack is an investment. Sometimes you win, sometimes you lose. If you are good, you win a bit more than you lose. But having fun and, at worst, losing a minimal amount (if anything) is really the goal.
Let's see. Sterling buys tens of thousands of shares in order to drain the company? When he already has 50,000,000+ shares? Does that make ANY sense?
You may be right. Time and investigations will tell. As a general rule "fraud" and "penny stocks" are often interchangeable terms. I tend to think PHOT was engaged in questionable financial reporting, which is why I am glad to see the CFO gone. As a corporate controller for many years, I ultimately decided what was or was not presented on the financials. A CFO who allows financials to be presented/released that are not FASB compliant deserves to be terminated.
I agree with you. The "good Samaritan" part was only to reveal to all who post here any personal bias I may have. As noted, I have not seen or talked to Sterling in decades, and people change. As far as the share dilution, I suspect it was the only way they could raise money. Was it a good thing? Probably not for shareholders. However, expanding the number of shares was well publicized before it was done, and shareholders did vote on it. With 20/20 hindsight, I should have sold my shares at that time. As we all should have.
Penny stocks are a form of gambling, and anyone who spends money they need on penny stocks is making a very bad decision, similar to putting that money in a slot machine. I'm also big on full disclosure, as you point out. Not sure why people think Sterling et. al. should go to prison. After all, the people who run the big banks that truly destroyed millions of people aren't going to prison.
I believe your original bet was that Sterling would go to prison. There seem to be a lot more conditions all of a sudden.
I can't speak for anyone else, but I didn't know this forum existed until a few weeks ago. Full disclosure: I bought PHOT almost a year ago with play money at around three cents a share, so I'll only lose a few $$$ even if the company goes bankrupt. More full disclosure: Almost forty years ago, I cut off part of my foot in a motorcycle accident. The guy who took me to the hospital, and stayed with me there, was Sterling Scott. I've never forgotten that, even though we have not talked to, or seen each other, in decades. He may have saved my life, and one does not easily forget something like that.
Over what time period?
Having been in accounting for 40 years, including critiquing FASBE exposure drafts, I have a bit of knowledge about financial statements. Like taxes, most people try to push the envelope as far as they can. PHOT valuing the stock for F/S purposes at two cents per share when it was selling for thirty times that amount was clearly overly aggressive. But it does not constitute fraud. Remember that restating the financials has zero effect on the company's cash flow. In fact, the financials may soon improve, if the stock distributions are marked to market. In that case, PHOT will show a "profit" this quarter of perhaps $20M. None of it real, of course. Keep in mind that while everyone is entitled to their own opinion, they are not entitled to their own facts. Are we still on for the bet?
Neither Sterling nor Liz will be going to prison. There is a big difference between stock fraud and undervaluing stock value on financial statements. The financials have now been restated, and that will be the end. The law firms will attempt to get some money, and PHOT's D & O will cover all but the deductibles. Whether PHOT survives is a different question, and an open one. But that will be determined by business fundamentals and practices, not any SEC action. PHOT may be acquired, they may streamline and stick to core business, they may go bankrupt. Right now, the downside risk is significantly lower than the upside potential.
That might be true if $71K meant anything to the company. But check their burn rate. How long will that amount of money last them--a few hours? He may be buying treasury stock, but he's doing it for profit potential.
PHOT is trading 3-6M shares/day. No way Sterling can do anything to prop up the stock price with that volume level. It would cost him $15,000,000+ a month. He's buying because he believes the stock will go up--quite possibly when the next set of quarterly financials are released...
Investors purchased over 3,000,000 shares of PHOT today. Some people are getting their orders filled...
You are half right. PHOT will be at .12 tomorrow.
Couple quick comments:
PHOT was suspended by the SEC for distributing large amounts of stock to Board members and acquired companies and valuing these shares at far below market price. This significantly distorted their financial statements. It was certainly a very poor error in judgment, but not criminal. As a non-cash transaction, this had no "real" effect on their financial situation, only on the books. Oddly, their financial situation will look much better now that the stock price has dropped. For example, one hundred million shares valued at two cents (the stated value originally) is $2,000,000. The real value at the time was more like fifty cents, or $50,000,000. Presumably, PHOT did not want to show a $50M expense, so they listed the value at two cents/share. Now they are forced to take the expense at full value, but with the stock trading at twelve cents, they have "recovered" (for financial statement purposes) about 75% of the value of the distributed stock. At the current price, I would rate them a "speculative buy."