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AAGH send messages. I agree i_like_bb_stock. That would sure be nice.
10 weeks before their Q2 filing, they said that the company “… has already doubled its sales revenue against the first quarter. With one month still remaining in Q2 the company anticipates a very strong Q2 report.” This was a message. The subsequent Q2 filing followed through on their “very strong” prediction with a Q2, 2006 showing results that were more than 4 times higher than the best previous Q since the beginning of 2005 for net income (and almost double the best previous Q’s in revenue), and the first positive net income Q in the previous 12 months.
These guys are not hype. On Sep 1 they surprised everybody by issuing a 1 month financial (July). The PR said that they “…posted profits of $609,708 on $1,012,564 revenue in the month of July 2006. This represents increases of 745% and 590% respectively over July 2005 profits and revenues of $81,738 and $171,410.” This was another message.
Now we’ve seen them order NOBO list info … yet another message.
So what’s the message? It’s that this company is taking measures to support and promote the share price, and that they have the company performance to support it. By the way, insider sales from the beginning of 2004 to date is zero. The NOBO tactic only works well for real companies that can demonstrate that they are in a turnaround or growth mode. This is one of them.
rjc
The Non-Objecting Beneficial Owner (NOBO) List is the newest tool in the fight against naked shorting on the exchanges. It was first seen in general use around Oct 3, 2006 and is used to perform an accounting of the number of shares apparently in circulation for a given company. When compared with the actual outstanding shares, this gives a measure of the degree to which a stock is being (illegally) shorted. This evaluation is being offered by ADP Investor Communications ( http://www.ic.adp.com/nobo.html ). ADP performs annual meeting mailings and proxy tabulations for almost all brokerages and banks.
From the Investors Hub NOBO board at http://www.investorshub.com/boards/board.asp?board_id=4365 …
“The NOBO/OBO System
The names of the ultimate beneficial owners of street name shares - i.e., the customers of the brokers and banks who have deposited the shares with DTC - are maintained by the brokers and banks, not by companies themselves. Recognizing that this system left companies without direct contact with a large proportion of their beneficial owners, the Commission adopted rules in 1983, which went into effect in 1986, requiring brokers and banks to provide companies with lists of "non-objecting beneficial owners" (or "NOBOs") who did not object to having their names and addresses supplied to companies.17 Objecting beneficial owners (or "OBOs"), which constitute an estimated 75 percent of shares held in street name,18 still may be contacted directly only by the broker or bank, or its agent. Although companies may mail proxy materials directly to NOBOs, as a practical matter they never do so, because current SEC rules require companies to forward proxy materials through brokers and banks regardless of whether they are also mailed directly.19 Therefore, companies only use NOBO lists to mail out supplemental materials, annual reports and quarterly reports, which do not have to be mailed through brokers and banks.20 Furthermore, because only the brokers and banks are legally entitled to vote shares held in street name, companies cannot use NOBO lists to enable beneficial owners to vote directly with the company.”
Some companies (other than AAGH) that have requested a NOBO list are SSSU, AWYB, and EZTO. In general, good companies with a real product and trusted management are seeing a significant improvement in share price when they advise that they are requesting the NOBO results, when they publish summary results, and when they publish the resulting action that they are taking. Not surprisingly, each company usually follows with a complaint to the NASD, and other responses such as a share recall and reissue (with a new CUSIP), a share buyback, and a forensic audit are either being done, or are being evaluated. This is all happening quite quickly, and you will hear lots more of the NOBO list in the future.
Interestingly, companies WITHOUT a strong net income profile that go the NOBO route are not seeing an increase in share value during the process. It looks like this is one of those times when the good guys do win. The increase in share price is ultimately driven by (required) short covering, but in the very short term, it can be driven by astute investors buying in advance of the covering that will follow.
The best possible packaging, for NOBO list benefit, will see a company that has recently turned itself around and is now showing significant net income, accompanied by recent changes that would explain the growth, a willingness to show detail in their filings, a willingness to make their financial position clear, and a willingness to offer positive guidance for the near and mid-term future. A history of prior guidance that came to pass as described wouldn’t hurt either.
I hope that I’m not being too subtle … yes AAGH does fit the above profile exactly.
rjc
AAGH getting NOBO list - I know this company.
They had a lackluster 2005 with an overall loss. As dismal as that sounds, a reasonable Q1 2006 (MUCH lower loss), a big Q2 with significant net profit (their largest net profit Q ever), and a single month statement for July 2006 with almost double the net profit of the entire Q2, has marked the turnaround.
We have learned here that the NOBO list will only help a good company. This is one of them
rjc
For eps estimate, see post 5194 on this board at:
http://www.investorshub.com/boards/read_msg.asp?message_id=13618131
rjc
AAGH - I know this company.
They had a lackluster 2005 with an overall loss. As dismal as that sounds, a reasonable Q1 2006 (MUCH lower loss), a big Q2 with significant net profit (their largest net profit Q ever), and a single month statement for July 2006 with almost double the net profit of the entire Q2, has marked the turnaround.
We have learned here that the NOBO list will only help a good company. This is one of them
rjc
There was another updated filing today (Oct 11). This time it’s the 10Q for the first quarter of 2006. It’s another non-issue filing as I read it, and I wouldn’t be surprised if we see the same thing soon for the Q2 filing.
The main reason for the filing was to mention the Note 11 changes from 2004 (see my earlier post). They also made some minor changes that I consider to be housekeeping. For example, they say that this filing was done to “to expand our disclosures in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations”. It sounds like a big deal, but here’s the actual change:
Old version: “Readers are referred to BAWC's Annual Report on Form 10-KSB for the year ended December 31, 2005 as filed with the Securities and Exchange Commission on April 17, 2006.”
New version: “Readers are referred to AAGH's Annual Report on Form 10-KSB for the year ended December 31, 2005, as filed with the Securities and Exchange Commission on April 17, 2006 and October 10, 2006, as amended.”
They also added more dialog to the many many pages of their “risk factor discussion”. In this discussion, while they continue to list bird flu, weather, and other items as possible risks; they have now also detailed some potential restrictions that could come from the Chinese government. For example, they note that the government “issued a notice prohibiting commercials for value-added services related to "fortune-telling" from airing on radio and television stations”. The risk-factor identified now, is that they could extend this restriction to internet "fortune-telling" advertising too.
Oh yes … and in references to Chinese currency, the updated filing changes references to the Chinese currency (correctly) from the renminbi to the Renminbi (note capitalization).
So what’s this all about? New auditor? SEC request? Doing it on their own?
I don’t know. In general though, it’s always a good sign when a company is seen to try to keep their public information complete and current. These guys continue to act like a real company, and that is good.
rjc
I found the REAL change to the 2005 year end 10K.
The accountants still say their good words like “In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company …” yada yada yada, (and word for word like the original); but they now go on to say:
“As more fully described in Note 11, the Company has restated its weighted average shares outstanding and resulting earnings per share amount for the year ended December 31, 2004, to retroactively reflect the weighted average number of shares outstanding based on the reverse acquisition in 2004.”
Here’s the NEW Note 11 (from page 41):
“NOTE 11 - RESTATEMENT TO CONSOLIDATED FINANCIAL STATEMENTS
Based on the comments from the Securities and Exchange Commission, the Company amended the consolidated statements of operations for the year ended December 31, 2004 and extended Note 1 to the consolidated financial statements to provide additional information regarding the recapitalization of the Company as a result of a reverse acquisition in 2004. The restatement was made to retroactively reflect the weighted average number of shares outstanding for 2004. The effect of the restatement was to decrease weighted average common shares outstanding and increase earnings per share. The restatement had no effect on total stockholders equity or net income in the accompanying financial statements. The following table presents the effects of the aforementioned amendments to the basic and fully diluted earnings per share.”
The table shows the changes (and remember that this was just to the 2004 figures) as follows:
The Weighted Average common shares outstanding - Basic and diluted for 2004 was changed from 19,862,000 shares to 18,487,425 shares.
The resulting earnings per share - Basic and Diluted was increased from $0.02 to $0.03
This is a non-event folks.
The eclipse is over. It is once again safe to stare directly into the sun.
rjc
I had a quick scan and couldn’t find any significant differences. This is a revision to the 2005 year end report. The only difference that I have found so far is that they now specifically name their “media coverage and advertising” sales rather than just having them lumped in with “product sales”. The numbers are unchanged.
I’m assuming that there were some clarifications required to the 10K, and that this revision had to be filed before AAGH are allowed to PR any further financial information (like a possible statement of August revenues/net income). Presumably we could now see Aug figures, where without this filing, we could not.
rjc
4 linea above the top post: click on AAGH Quote/Level II - News - Quote - Chart
rjc
The O/S share count has been unchanged at 29,862,000 since the end of July.
rjc
PLNI should be ... "Should be"?
Thanks for dropping in Eric.
I have read your posts on some other stocks, and have always found your observations quite useful. Every now and then, a company valued in the pennies shows us that they have a workable plan.
Part of the story is in the numbers. Here are the month by month revenue and net income figures since the beginning of 2005 (most are just quarterly numbers divided by 3). Draw yourself a simple396, graph and the turn around shows up quite nicely.
........ Revenue / Net Inc
2005 Jan ... 219,980 ... 333
2005 Feb ... 219,980 ... 333
2005 Mar ... 219,980 ... 333
2005 Apr ... 216,333 ... 23,733
2005 May ... 216,333 ... 23,733
2005 Jun ... 216,333 ... 23,733
2005 Jul ... 171,410 ... 81,738
2005 Aug ... 204,026 ...( 52,000)
2005 Sep ... 204,026 ...( 52,000)
2005 Oct ... 157,165 ...(111,741)
2005 Nov ... 157,165 ...(111,741)
2005 Dec ... 157,165 ...(111,741)
2006 Jan ... 131,873 ...( 35,895)
2006 Feb ... 131,873 ...( 35,895)
2006 Mar ... 131,873 ...( 35,895)
2006 Apr ... 396,667 ... 111,667
2006 May ... 396,667 ... 111,667
2006 Jun ... 396,667 ... 111,667
2006 Jul . 1,012,546 ... 609,708
edited
rjc
AAGH Insider sales
AAGH insider sales: 2004 to date ... Zero
I keep reading that Sep 1, 2006 headline: “Asia Global Holdings Corporation Posts July 2006 profits of $609,708 on $1,012,564 revenue, up 745% and 590% respectively over last year; plans to expand its involvement in advertising and media in China.”
I guess it’s clear why they’re not selling.
With the “National Day” holiday in China officially a 3 day holiday, but functionally a 5 day holiday (plus weekends), we might not get the PR announcing AAGH’s confirmation of the execution of part of their plans to expand their “involvement in advertising and media in China” until Monday.
Patients all. The rewards can be great.
rjc
The Hong Kong stock market was closed today (Monday in Hong Kong) for the “National Day” holiday which is celebrated over a 3 day period (Oct 1-3). The mainland China financial markets will be shut for the entire week for the National Day holiday.
This could affect the release of news of a financial nature.
rjc
AAGH announcement timing and quality
The Sep 1, 2006 announcement of July’s significant jump in net profits (and revenue) was unusual both in the large size of the increase, and in the fact that the company released any information at all. Quarterly reports are normal; reports on a one or two month period are not. There is always concern over how reliable the reporting of an over the counter stocks is when the information comes from outside of the more regulated quarterly or annual reports.
We will know in mid November (when the Q3 report will come out), just how reliable the PR’d July results were, but I’ve found an indicator to help us decide on the company’s credibility score … they’ve done this before. Well not exactly the same thing, but on June 1, 2006, (when they were still filing under BAWC rather that the current AAGH) the company issued a PR (read it all at: http://tinyurl.com/q7fo7 ) that said, in part:
Illinois (Media - NewsWire) June 01, 2006 - -- BonusAmerica Worldwide Corporation (OTC Bulletin Board: BAWC) is pleased to announce today that its Media and Advertising subsidiary in China -- Sino Trade-Intelligent Development Corp. -- has already doubled its sales revenue against the first quarter. With one month still remaining in Q2 the company anticipates a very strong Q2 report.”
Ok, it sounds a little like pumping, and some investors at that time might have been thinking “scam”. Perhaps not surprising as the company had published 3 Qs in a row of losses to that point. The stock price jump that followed this PR only lasted a week or two. There was some skepticism, as there always is when a company seems to have finally gotten its act together, and is entering a growth phase. But what did the Q2 results turn out to be, that the PR said the company anticipated being “very strong”? The Q2 report that came out about 10 weeks later (Aug 14), showed Q2, 2006 results that were more than 4 times higher than the best previous Q since the beginning of 2005 for net income (and almost double the best previous Q’s in revenue), and the first positive net income Q in the previous 12 months. In retrospect, it is now clear that the company was not pumping, but rather giving its shareholders exactly the kind of information that all investors claim that they want.
In my eyes, I’m willing to give the company’s PR’ed July figures more than just the benefit of the doubt. That PR (read it all at: http://tinyurl.com/nzgyl ) said, in part:
“LOS ANGELES, Sept. 1 /PRNewswire-FirstCall/ -- Asia Global Holdings Corporation (OTC Bulletin Board: AAGH), formerly BonusAmerica Worldwide Corporation, posted profits of $609,708 on $1,012,564 revenue in the month of July 2006. This represents increases of 745% and 590% respectively over July 2005 profits and revenues of $81,738 and $171,410.”
I see this as a confirmation of the strong turnaround that was first seen in the June 1 PR (“very strong Q2” coming), and then again in the Q2 figures themselves.
This said, it’s clear that many are still waiting for more of the story. Whether we get it this week, or have to wait until mid Nov, I don’t know. I would like to see something this week, but in any case, I have a positive view on the company’s credibility, and look forward to their future PRs, as they become available.
rjc
Aug Net Income, P/Es, and valuations
The problem:
If we receive Aug Net Income figures (possibly next week) how should the figures be interpreted? The Aug numbers will represent another partial quarter, and the company’s Net Income profile is jumping unlike anything that could have been predicted from data that we had as recently as two months ago. Here’s an approach that I have been playing with. Once the Aug figures are in, the analysis below will simplify significantly. I wasn’t willing to do a lot of predicting based on a single (July) special month, but when Aug is also available, I think that the story might clarify a lot.
Data source:
Using published Net Income figures (10Qs and PRs)
Split each quarterly figure into 3 equal (monthly) figures for calculations
Using current outstanding share count of 29,862,000 shares
Assumptions:
New, or changing, high growth companies can see a P/E ratio of 50. This is because their expected future is quite different from their previous 12 months of operation. Mature companies going through “normal” growth usually see a more conservative P/E ratio of 20. Despite AAGH’s good fit with an earned P/E of 50, I will be using the more conservative (lower) Price/Earnings ratio of 20 for the following calculations
You get to pick your own amount of historical data that you feel is now most representative of AAGH’s current position (2, 6, or 12 months of history).
Scenarios:
Predict that the next 12 months of Net Income will be the same as:
- Running 12 months to (and including) Aug (includes 7 months of losses).
- Running 6 months to (and including) Aug (includes 1 month of losses).
- Running 2 month (Jul/Aug) only.
A) If Aug Net Income = zero:
- using 12 month history >> justified share price = $0.30
- using 6 month history >> justified share price = $0.51
- using 2 month history >> justified share price = $0.71
B) If Aug Net Income = $304,854 (half of July’s Net Income):
- using 12 month history >> justified share price = $1.22
- using 6 month history >> justified share price = $1.63
- using 2 month history >> justified share price = $2.03
C) If Aug Net Income = $609,708 (same as July’s Net Income):
- using 12 month history >> justified share price = $2.45
- using 6 month history >> justified share price = $3.68
- using 2 month history >> justified share price = $4.90
If you would prefer to use a higher P/E, just multiply the above share prices by the change in P/E (for a P/E of 40 rather than 20, multiply the above “justified share price” by 2).
rjc
Hi monergy. If you’re doing some digging around, I would like to learn about the size and current business profile of the Tung Sing printing operation. So far, all that I’ve found on them is the following:
Tung Sing Printing Co., Ltd.
4/F., Fortune Industrial Building, 35 Tai Yip Street, Kwun Tong, Kowloon, Hong Kong.
Tel: (852)27568272
Fax: (852)27963562
Email: tssale1@tungsingprinting.com.hk
rjc
AAGH is in the business of putting irritating ads on the internet, with a primary target of China, and Hong Kong in particular. Their last 10K, which takes us to the end of 2005 shows uninspiring performance, however, the 2 10Q’s since then for Q1 and Q2 tell a different story, and the Sep 1 PR offered some rather spectacular (positive) July data.
If this penny stock can see figures like July's continue into the future, then the stock could easily be seen as a $2.00 stock based on the currently outstanding 29 million or so shares. There's no way at this point to know for sure whether July's performance will be sustained, so we must of course tread with some caution; but let’s see what conclusions we can tease out of what we’ve got.
First the net income from the Q’s: 2005 was a drift down for most of the year with a final Q showing a LOSS of about $335,000. Q1 2006 reduced the 3 month loss by about 2/3 to about $108,000, and Q2 this year (to the end of June) brought a significant jump to a profit position of (plus) $335,000 for the quarter. Although this $111,667 per month rate is impressive in itself, it’s the Sep 1 PR showing a July (single month) net income of $609,708 (more than 5 times higher than Q2’s average monthly net income) that has really caught investors’ attention.
The thing that kicked off the current run was the surprise 1 month (July) financial summary that was PR'd. I haven't heard of a company doing that before, and the question now are will they do the same trick again (in the first week of Oct?) for August, and why did they release the July figures at all?
If July's great performance turns out to be quite abnormal (and was PR'd for that reason), then more “normal” (lower) Aug results (or even not publishing Aug results) could swat this stock back down.
So why did they PR the July financial summary, and what does that mean for the future. Ok, they did it to make the price rise. Why did they want this … don't know, but they are an acquisition company, and maybe they want to buy something with shares. This of course explains why they increased their OS a few weeks ago … effectively, they need some “dry powder” if they want to make a purchase. This is a pretty good plan, but it does require the share price to be rising to work well. If this is the plan, I don't think that they can risk the price dropping if they fail to deliver an equivalent Aug financial PR.
When the July PR came out on Sep 1, they already knew how much cash had come through the till in Aug, and how much had gone out, so they issued the Jul numbers pretty much knowing what the Aug numbers would be. With bad Aug numbers, I don't think that the Jul figures would have been PR'd. I am now assuming a good set of numbers for Aug too, and I'm assuming that we'll see them in the first week of October.
On the fundamental side, I do have a thought on potential market size. If these guys were selling tooth brushes, then with a potential market of 1.3 billion people in China, even selling an inexpensive product can make a company rich. AAGH are dealing with the placement of internet advertising though, so you have to wonder if the Chinese internet base is large enough yet to let AAGH do well. As it turns out, it's more than large enough. According to the article at http://tinyurl.com/ol9u7 from about a week ago …
"The number of broadband subscribers in China is growing at a staggering 79 per cent annually, and will reach 79 million in 2007, consulting firm Ovum predicted in research released today.
Recent estimates from Leichtman Research suggest that the number of broadband connections in the US, currently the world's largest market, is around 51 million."
Oh yes, one last thought that comes to mind … how can you go wrong with a ticker symbol that sounds like a Scottish expletive?
rjc
It’s easy to sell if you aren’t sure what’s going on, yet even in the confusion some of us decided to step up and buy a couple million shares today … mainly between 19 and 20 cents. Why?
I can’t speak for the others, but for me today’s action all comes from the sellers misinterpreting the news.
rjc
Free real time chart
http://tinyurl.com/lpjy5
rjc
Sorry Arkait ... I was thinking of RB = Royal Bank (the people that Run Action Direct discount brokerage that I was discussing earlier).
For my problem resolution stuff with Raging Bull, we corresponded through their email address of: RBSupport@mail.esignal.com
This should work for you.
rjc
It sounds like you didn't follow my instructions.
As to "Any suggestions?"; I can't help without knowing your question.
As to "they did not seem to have any knowledge of Raging Bull"; perhaps you should contact Lycos for this information.
rjc
Arkait ... I reached RB throuigh their web site at https://www1.royalbank.com/english/netaction/sgne.html?
Click on "CONTACT INFO" on the blue bar at the top, then "Customer Support Request Form", and contact them that way.
They will respond by email and give you an answer, and an assigned problem ID for further email correspondence on your subject. They don't read emails without an already assigned problem ID in the subject line so you'll have to start through their web site.
You don't have to be an RB customer to use their support people.
rjc
I had the same problem a few weeks ago. I contacted them and they said flush your buffer (clear your history file), turn your machine off and on again, then give it another try.
I followed the instructions to no avail and then asked for further help.
They then said:
=-=-=-=-=-=-=-=-=-=-=-
Hello,
We have investigated the issues listed in your email. We have posted a "test" message just as you would on the TEST message board using your member name "rjc".
Please use the link below to read the "test" message.
http://www.ragingbull.lycos.com/mboard/boards.cgi?board=TEST&read=16380
If you have any further questions please let us know.
Regards,
Raging Bull Support
=-=-=-=-=-=-=-=-=-
I saw their post, tried replying to it (successfully), and tried a new post (also successfully).
Perhaps they can fix the problem for you by them posting with your alias to the test site. I first contacted them through the RB help system. For our problem resolution stuff, we corresponded through their email address of:
RBSupport@mail.esignal.com
rjc
Joda ... you can see my correspondence with them in post 41016 on this board.
rjc
Here’s one simple thing that you can do for a start.
I emailed my Canadian broker (Action Direct) and told them that I was concerned that the BCIT shares that I had purchased through them might be counterfeit. I offered a link that told the story, and I asked for clarification on a few issues. They replied with an email addressing my various concerns and finished by saying “…your shares are and will be treated as valid by Action Direct.”
rjc
If someone sells you a fake Rolex watch, you don’t go after Rolex for redress … you go after the watch seller (if you can find him). Megas is right.
If you are holding what are deemed to be counterfeit shares, your dealings to resolve the problem are with the broker that acquired them and sold them to you. I’m assuming that everybody reading this board that has shares, has only counterfeit shares. There may be some exceptions.
Put your shares up for sale when you like the price being offered. Your broker will either say that he sold you valid shares and allow the transaction, or will say that he sold you counterfeit shares and will refund your original purchase price. How your broker handles the “problem” if the shares are considered to be counterfeit, may be the broker’s choice … I’m not sure.
The technicalities of how this will play out are still unknown to us; but there is the possibility of the mother of all short squeezes being part of the answer. I wouldn’t be too eager to sell your shares until you see what the game is.
rjc
Perhaps they ment the state of nirvana.
rjc
The answer should be here ... "See order # 4282 for details."
What reason was given?
rjc
My test sell at $0.055 is still there (survived the day change), but I'll be removing it soon as I expect to get more for it than that after active trade starts again.
rjc
I haven't tried. There was mention of orders placed not surviving through to the next day. I'll let you know if mine still shows as "open" tomorrow.
rjc
Try it without the "X"
rjc
You ask: "Did they execute it? ... Depends what you mean by "execute it".
They're just a broker. First they confirmed that I had shares to sell. This did happen, and that is reassuring in itself. Then they submitted my order (good for about a month) to the market maker, or whereever it goes. Then they wait for a reply that the order has been received. Up to this point, my display shows "pending" as an order ststus.
Once Action Direct gets confirmation that the order has been received and accepted, they change my display to read "open" (which they have now done).
The display (which they get from the exchange in some way) still shows a bid and ask of zero.
rjc
My order placed through the internet to sell some BCIT at $0.055 has been accepted by Action Direct (a Canadian discount broker run through the Royal Bank).
rjc
For any of you that are musically inclined ...
I'm setting up a tuba group called the Tuba-fours.
Not quite full planks. We're sort of entry level junior planks.
rjc
Interesting CMKX Faulking Truth article
The CMKX Story: When Too Much Isn’t Enough
by Mark Faulk “..every stockholder is entitled to have a certificate, signed by officers or agents designated by the corporation for the purpose, certifying the number of shares owned by him in the corporation.”
On October 28, 2005, CMKM Diamonds, Inc. (best known by its trading symbol CMKX) was delisted by the SEC for non reporting violations, halting trading of the stock in a company that had issued an incredible 703 billion shares of “real” stock, sold to over 50,000 shareholders. Shortly afterwards, the company appointed a three person task force, consisting of Attorney Bill Frizzell, Attorney Don Stoecklein, and Howard Hughes’ former right-hand man Bob Maheu, to “identify bonafide shareholders” of the company’s stock, a process that after seven months, and three deadline extensions, still has not been completed, as brokers have used excuse after excuse to delay delivery of shareholders’ stock certificates.
Yesterday, Bill Frizzell sent a complaint letter to the NASD, along with copies to the SEC, Nevada state securities regulators, and several key members of Congress, claiming that there is “indisputable evidence of large numbers of failed deliveries in this stock,” and that brokers are trying to undermine shareholders rights by denying them their rights to ownership, stating that:
Nevada law NRS 78.235 mandates that each shareholder has the right to request and receive certificates of ownership from the company for their stock. Specifically, the statute states “..every stockholder is entitled to have a certificate, signed by officers or agents designated by the corporation for the purpose, certifying the number of shares owned by him in the corporation.”
In his complaint letter to the NASD, Frizzell lists a few of the reasons that brokers have given their clients for failing to deliver the stock certificates to their rightful owners. It is a list worthy of David Letterman’s Top Ten:
The most alarming problems are represented by those shareholders who have been requesting certs from their brokers since the company’s first announcement of a distribution seven months ago. Here is a sampling of excuses being given to shareholders as reasons for their inability to obtain a cert:
1. “We had your cert, but it is now lost. It will take us another 6 to 8 weeks to obtain another one.”
2. “This stock purchase was a book entry only and no certificate is available.”
3. “Your stock was classified as a worthless security and is no longer in your account.”
4. “Our clearing firm has not been able to deliver these certificates due to a backlog of requests at the transfer agency.”
5. “I have been instructed we are no longer pulling certs for CMKM and there is nothing I can do. You need to contact the company.”
6. “CMKM Diamonds has a “K” code next to it, indicating that it is being held in safekeeping for the client. The clearing agent has made the decision not to issue certs but rather fax a copy of the certs it holds to the transfer agent.”
7. “Attached herewith is evidence of ownership of shares held electronically by XYZ clearing for ABC broker. ABC to confirm receipt of this proof of shares of CMKM and related companies are held with XYZ.”
8. “In light of the lack of cooperation (by the transfer agent), your May 15th, 2006 deadline must be bogus and must be extended, and Entourage shares could of course still be sent to ABC for the benefit of XYZ.”
9. “MNO said they had discussed with the Task Force the acceptability of the affidavit as proof of ownership in lieu of the certificate, and that it would be accepted.” No such conversation ever occurred with the Task Force members.
10. “We ordered your certificate, and it has been lost. You must now fill out a loss certificate.” The transfer agent confirms that no certificate was ever issued.
Each quoted statement above is taken verbatim from a shareholder’s letter or from a broker’s written response to a shareholder’s request for a cert. I could continue with pages and pages of documented incidences of these broker responses to the requests of the shareholders if such is necessary to establish the need for a full investigation.
The key to the Task Force complaints about CMKX is a scheduled distribution of shares of another company’s stock, Entourage Mining Ltd. (ETGMF). Even though there were a total of 703 billion shares of CMKX, and even though the stock hasn’t traded for almost seven months, brokers still haven’t been able to deliver stock to all of the shareholders who have requested it, pointing to a potential short that could total in the billions of shares.
Considering the fact that the DTCC has claimed that the amount of failed deliveries has never exceeded 500 million shares for the entire market, it’s quite likely that the failed deliveries in this one little company….that no longer even trades….could surpass the entire number of fails claimed by the DTCC for the entire stock market.
But the story gets even more bizarre. On April 28, 2006, a month before the final deadline for share distribution, the DTCC emptied its vaults of all CMKX shares, sending them to the brokers via the transfer agent, and the Task Force eventually compiled a list with a broker-by-broker breakdown of who had how many shares left to hand out. The distribution of certs continued, with some of the country’s biggest brokers dragging their feet in what seemed to be an attempt to stall for time until they could come up with a way to cover their trades…and their tracks.
And just this week, some of the brokers did just that, turning in their own CMKX certificates in the brokerages names (instead of the “real’ shareholders names), in an attempt to receive the Entourage shares themselves. Why would they do this? There’s only one logical reason for it. They intend to take the Entourage shares and deposit them in the accounts of the remaining CMKX shareholders who haven’t received their certificates….as “book entry’ deposits. In other words, if they’re short say, ten billion shares of CMKX, they simply “electronically” deposit the Entourage shares in the accounts, even if there aren’t nearly enough Entourage shares to give all of the real CMKX shareholders what is owed them.
They want to trade their short position in CMKX (which can’t be covered because the stock is no longer available) for a short position in Entourage Mining, which they can then go out and buy on the open market (because it is trading). Voila! No more short position, and hopefully, no more massive legal liability against the brokers for robbing the shareholders blind.
There’s only one problem: the brokers don’t own the stock, the shareholders do. Since CMKX is now a private company, the brokers should no longer hold it in street name. They were only the custodians of the stock, holding it until such time that the real owners, the shareholders, the ones who bought and paid for the stock in the first place, requested that the stock be handed over to them.
In all reality, the brokers should have delivered the CMKX stock within three days after they made the sale, as required by law. Instead, the stock hasn’t even traded for the past seven months, and many of them still can’t deliver.
So who are the guilty parties? That still remains to be seen, but the Positions Report issued by the DTCC in April provides some definite clues. First, let’s go back to the letter sent out by Frizzell yesterday:
The Task Force has now received certs in the name of certain brokerage companies. Our investigation reveals a potentially huge naked short position in at least two of the very companies that have sent us certs. The certs sent to the Task Force by the brokers represent billions of shares of CMKM stock. It is not the intention of the company to distribute Entourage stock to securities intermediaries and clearing houses for them to distribute the stock at their discretion. It is clear from the Regulation SHO records in conjunction with other sources (ADP, the transfer agent and the DTCC) that huge fails to deliver in this stock currently exist. It would be a breach of the fiduciary duty of the company to distribute these assets to a broker in lieu of its true beneficial owner when there is evidence of known fails to deliver occurring at the same brokerage house.
Now let’s look at the Positions Report. There are only five brokerage houses with reported positions (as of April 14) of over a billion shares, and of those five, Ameritrade has over 4.1 billion shares on the Positions Report, and it is likely that they still hold a sizable portion of the reported 180 billion shares that they once had. And yet they refuse to distribute the remaining shares to their rightful owners, even after seven months. What do they have to hide?
Other brokerage firms with substantial positions on the list include NFS LLC with 5.3 billion shares still in street name as of April 14, Citigroup with 2.8 billion, and Penson Financial with just over 2.1 billion. I repeat: why haven’t these firms turned over their shares to their rightful owners. What do they have to hide?
Then, on the other side of the spectrum, we have E*Trade. The positions report shows them with a paltry 38,594 total shares left to distribute as of April 14. Considering the fact that I’ve personally received emails from CMKX shareholders who haven’t received their certificates totaling tens of millions of shares, it will be interesting to see how they mange to cover those accounts and the others who are still waiting to get what they paid for so long ago.
This is nothing more than a shell game, a series of ploys and stall tactics designed to hide the fact that something is very wrong with our stock market system. Couple this little tale with the growing number of other companies now presenting evidence of their own of rampant stock market manipulation and stock counterfeiting, and you have a trail of corruption that is unraveling at a frightening pace.
Bill Frizzell put it in perfect perspective in his closing paragraph, one that I hope our securities regulators and elected officials pay close attention to:
There was a time in the market place when shareholder’s rights at least co-existed with the rights of the broker/dealers. You have now been presented with evidence of shareholders who have demanded that their brokers issue certs for their holdings. Many shareholders have been flatly refused by their broker. This violates Nevada state law and the spirit, if not the letter, of federal regulatory law. I call on you to begin an investigation into this injustice.
And that, my fellow patriots, is the Faulking Truth.
Sounds good to me.
It's always nice to see a plan come together.
rjc
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rjc
TIV - Not a penny, but short squeeze starting
Two big volume bottoming days just finished
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Short Squeeze buzz building on TIV:
http://finance.yahoo.com/q/mb?s=TIV
TIV can double or more from where it is very soon.
The pre-existing TIV shareholder base is sitting up at attention as they've been waiting for this for some time.
The float on TIV is not just super low, TIV's FLOAT IS IN THE NEGATIVE to the tune of 3M shares due to:
1. Shorts on record with almost 4M short positions out.
2. Heavy naked shorting by shorts to maximize the payoff on their legit short bets. The naked short position must be over 1M shares as well.
3. The dedication of insiders and real investors holding their shares tight means even without a short position of roughly 5M (legit shorts + naked shorts) against a 23M OS the effective float would still be very tight. TIV management is quite sure the majority of shareholders is static leaving only 1-2M in effective trading float. Even 2M real float means there is debit of 3M in the float until the shorts cover.
You got it. TIV has a float debit of 3M shares.
The company is super undervalued due to a longer term short attack pushing the stock down.
The company is on the verge of major revenue increases now with confirmed activity with their own drilling rigs in fields with proven ready to flow reserves plus an existing pipeline and infrastructure which will bring the oil to market immediately.
TIV going profitable. They are a domestic producer at a time when this truly matters.
TIV stock is bottomed out. Rebound players are climbing on board too.
TIV shorts are really getting angry and naked shorting to push the tide back.
BIG SHORT SQUEEZE COMING. Watch TIV double soon.
Then watch TIV climb much higher into the Fall as revenues ramp and they are doing thousands of barrels a day. Then it climbs to tens of thousands of barrels the next year. Independent analysts inside the big brokerage behemoths put TIV's reserve values at $100 a share.
TIV's new production flow hitting the books this Summer will trigger their ability to state book value for each barrel coming out of the ground. This SEC obstacle will be progressively overcome as production ramps and as revenues increase so will TIV's intrinsic asset value being able to be added to shareholder equity.
TIV can be a $40+ stock in 2006 and many longs and savvy buyers now getting on board know it. First comes the short squeeze to get the monkey off of the stock's back, then comes longer term valuation gains.
TIV SHORT SQUEEZE coming to a theater near you. Don't miss it.
CHYS - Not a penny, but acting like one
Growth on minimal substance, but fundamentals now showing up. MUCH more to come as I understand it.