GTE CORRUPTION
April 11, 2006
GlobeTel Acts Accordingly
A few hours ago Seth Jayson at the Motley Fool penned an extremely hilarious update on GlobeTel (Amex: GTE). Last month I pointed out how the company's claim to have received a document purporting to be a standby letter of credit from Banco Do Brasil was doubtful at best and untruthful at worse. The stock seemed to be manipulated; our clearing firm informed us that short positions were being called as the borrow on the stock was extremely difficult. We were forced to cover our short in the $2.40s and become a mere spectator in the GTE saga.
The short squeeze failed to produce any lasting gains as, in the past two weeks, the stock has come in from the $2.50s to close at $2.10. Seth Jayson's article crossed the tape at 3:54pm and it seems some people had yet to read it before the market closed because the stock is changing hands at $1.99 in the after-hours.
I continue to reiterate my position that this stock is too risky own. Shorting it is also difficult even if you could get the borrow. And the options that are listed on GTE are thinly traded and trade for sky-high premiums.
So what emerges is an unplayable spectacle of greed, intrigue and possibly corruption. Fun, isn't it?
And as Jack always says: "You can't handle the truth! Son"
