Spongetech Delivery Systems, Inc. (fka SPNGQ)

[loanranger]

"one cannot simply assume that Pike is buying shares because he thinks this is a good investment."

Why not? Does the Occam's razor principle, relied on regularly around here, only apply when it fits ones own desired outcome?

There are some pretty fanciful explanations being floated regarding Pikes purchases, when the only things that we are absolutely certain of are that his funds owned 100,000,000 shares on 9/28/09 at an avg. pps of $.138 and that an additional 60,000,000 shares have been purchased since. Period.

Any shares, registered or unregistered that were purchased prior to 9/28/09 would have had to be included in that 100,000,000 unless they were sold prior to 9/28/09.

Any shares that were bought and sold (or shorted and covered) prior to 9/28/09 can't possibly matter any more. Can they?

Any shares owned by the Pike Capital Offshore Fund that were still held at the time of Daniel Pikes Form 3 filing would have had to have been reflected in that filing to reflect his beneficial ownership.

Any sales by any Pike Fund to any other Pike fund requires a filing until Pike Capital's ownership level drops below 10% of the last reported o/s level and all transactions between now and then require a filing.

If Pike has entered into a non-disclosure agreement with SPNG he will not be buying or selling shares in the open market until the agreement is terminated AND all the nonpublic information that he has acquired during the term of the agreement is in the public domain.....unless he's willing to break the law.

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Since others have felt comfortable repeating their theories on this issue multiple times, I'll copy and paste mine:

An alternative theory....just for fun and 100% speculation:
Somebody got his ear....or he gave his ear to somebody. His portfolio includes companies with troubled histories and he has made money chasing high risks before. He established a position of 100,000,000 shares by 9/28/09, with the average share math suggesting that a portion of those shares were purchased before 9/14 and at an average pps of $.138:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=45348177

So at least some of those shares were bought before the Post articles, the formal investigation commencement, the failure to file the 10K by the extension date, and obviously before the suspension and the letter threatening otcbb delisting. FWIW, the company announced the "appointment" of Deloitte & Touche LLP on 8/24.
I wouldn't have bought 'em, but.....

So at that point he had made a commitment. His history does not show him to be a trader. He apparently felt that he had uncovered a unique situation, because as you and I know the long term recovery rate from a 10 day suspension is abysmal....it rarely happens. Yet, not "soon after" as you indicate, but the very day that trading resumes he proceeds to go on a buying spree that lasts through the trading week, increasing his position by some 40%. At prices ranging from $.031-.063.
http://sec.gov/Archives/edgar/data/1201251/000101359409001621/xslF345X03/spongetechfm4-102909_ex.xml

He has averaged down before. I sure wouldn't, but....

Apart from another small buy he filled out to his current position on 1/6 and 1/7 at $.037-.04.
http://sec.gov/Archives/edgar/data/1201251/000101359410000014/xslF345X03/spongetechfm4-010810_ex.xml

Here's where my speculation may go over the top some:
On 1/14 the Post reported a suit by the NY Mets "that alleges the company stiffed the ballpark out of $300,000 owed for stadium-related advertising by sending them a bum check and then promising a wire transfer that never came."
I believe that a poster may have reported that suit a day earlier, but in any event it was around this time that the first public sign that the company's problems might extend beyond the regulatory and into the realm of operational cash appeared. The RME support structure ("investment arm") chipping in a stop payment notice.

If Pike was operating as my speculation suggests, this may have taken his risk/return ratio to a new level...it would have mine, for sure. One can play word games with a lot of stuff, but not cash position. He hasn't bought since....and I wouldn't be surprised if he doesn't buy again.

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Bottom line, I am not at all convinced that "one cannot simply assume that Pike is buying shares because he thinks this is a good investment."

Or at least THOUGHT that it was a good investment.