Sulja Bros. Building Supplies, Ltd (SLJB)

[janice shell]

Let me offer a cautionary tale:

Back in 1998, when passions were running high on the SI MTEI board, a group of shareholders decided to pay a visit to company headquarters. Other investors proudly named them the "Mag 7".

What did the Mag 7 find? As we learned later, they were greeted by a drunk Jack ("The Honest Oilman") Uselton, whose answers to their questions were largely unintelligible. They did get a look at the company books, though, and saw a great deal that they didn't like.

But what did they report to their fellow longs? They said that Uselton had been friendly, and that they felt on the whole pleased with what they'd found. They also commented on the cleanliness of the bathroom.

Why didn't they tell the truth? You see, they all went to dinner afterwards; it wasn't a very cheerful occasion. But in the end they decided to suppress what they'd learned. Why? The official excuse was that they didn't want "to give the bashers satisfaction". Several of them sold, but they didn't have anything to say about that on the board, either.

About ten days later, the SEC suspended trading in MTEI. Two weeks later the company closed its doors. Jack made off with the furniture and the painting of the dogs playing poker.

As you may imagine, shareholders who'd been virtually wiped out were furious when the truth came out.