Replies to post #1278 on DD Support Board and Research Team

[oldberkeley]

WLOCD & other pinks: on their board, one of the regular posters asks—in all seriousness— if the 4-for-1 forward split reduces the float. I see by his history that he’s been in many other pinks.

Everyone is ignorant about something, perhaps most things in this varied and complex world. But don't we expect that a person can swim before he ventures into deep water, that he can drive before he pulls onto the freeway, that he knows at least the basic rules of the game before he sits down at the table and begins to bet?

The ignorance, the innocence, the foolishness, the trust in company PR’s and the words of anonymous posters: astounding.

[mick]

hi ND, i got this from a message; maybe a started my friend.

as i see though NWMT --- NWMTD has continued the pr express.

Avoiding Stock Market Scams
Buzz up!

Apr. 13, 2010 | Filed Under: NWMT

We have discussed a couple of companies on this site that don't trade on the major exchanges (e.g. the NYSE, the Nasdaq etc). Though it has been mentioned that over-the-counter stocks do not offer investors the same protections as do stocks trading on the exchanges, the details were not explored. However, there are some "smell tests" investors may wish to apply to such apparent opportunities.

http://www.gurufocus.com/news.php?id=89953

Consider NewMarket Technology (NWMT), a company that provides a range of technology-based services. The company has total assets of $53 million, and has net current assets of $12 million. However, the company trades for just a couple of hundred thousand dollars! For a company with $100 million in sales, how can this be?



It is possible that the company is not a scam at all, but just a victim of poor management. The company has issued several rounds of preferred shares, which are convertible to common stock. The conversion rates are extremely dilutive, resulting in the issuance of millions of shares that flood the market with this company's stock. Investors who believe this company to be legit should beware of further stock issuances, as convertible preferred stock remains outstanding.



But upon further investigation, there may be more to this story than the idea that this is simply an undervalued stock undergoing a flurry of dilution. While the company claims to have "over 600 employees" and its "target markets are located domestically in all 50 states", it is very difficult to pinpoint from where the company runs its operations. It's impossible to reach anyone by phone at the company's headquarters, as calls to the company's two provided numbers repeatedly went unanswered! E-mail and phone requests to the company's investor relation's department were also ignored.



Public companies are required to have independent auditors, which provide some form of comfort to investors. But this company has gone through several auditors in the past few years, each of which appears to have little in the way of name recognition but much in the way of legal issues. The auditor of the company's 2008 financial statements is now barred from practice, as per these findings of the SEC. The newest auditor is a two-person, husband and wife tandem who appear to operate out of their own home, for this a $100 million, international company!

But while it may be impossible to speak with any of the company's employees, the company doesn't hesitate to publish schools of positive press releases to pump the company's stock, including this laughable video, put together by a really professional outfit:

It's important that it be re-iterated that it's not clear that NewMarket is a scam. But it's never clear whether a company is acting fraudulently. Investors in companies that trade over-the-counter must take special steps to ensure the investment is legitimate, since the added layer of protection added by the major exchanges is absent. Since the #1 principle of value investing is "Never Lose Money", companies that don't pass these basic tests should be discarded.


Disclosure: None


Saj Karsan
http://www.barelkarsan.com

[IRVINESULLY]

hi nodummy - while I can't argue what is posted concerning WLOC - I can say this - This poster showed up with VARIANT REVIEW Research blog and research -

Be aware, that Variant Research is brand new and it appears that WLOC is the only one one their site - This new site has a copyright of 2011. So, yes, definitely brand spanking new.

Also beware that Sykes and his newsletter sent out a note in December to short WLOC - and it didn't work - instead the stock continued to go up. So, BAM!!! Here's the newly formed Variant Review - Maybe a coincidence - but I don't believe in coincidences.

Also beware that Variant Research also states that they are short in this stock.: This is their statement: "Additional disclosure: The author of this article and/or his affiliates have a short position in the securities mentioned in this article at the time of publication. The author and/or his affiliates may change their position at any time without disclosure."

So while many of those things might be questionable - Sykes and Variant Review's actions are also questionable.

For the most part, I haven't seen toooooo many shorters who have YOUR $$$/investment in mind.

Meanwhile - WLOC - This is a small company - But I can say this - I work for a company that has Officers and Board members that also serve on many many different boards - and yes, they, too, are raking in the bug bucks doing it...And many of the companies are related one way or another. And I work for a huge, legal corporation.

JMHO

Meanwhile - will I and others make $ on WLOC? I can't talk for anyone else - I can only say I have made some excellent $ on it. But that's before the shorters came. Now I don't know - But I also know it can only go up for so long w/o some big bucks starting to come in and contribute to the bottom line. So, that part of the story cannot be argued with.

Thanks for your time.

Take care all - Good luck on all your investments.

Ginny