quote:Originally posted by milliam: Well, I can't say that I read all of the merger agreement, but I searched it pretty well. I can't find anything in there about Mike's preferred shares or what amount of shares he would end up with after the merger. I was pretty sure it was in there though.
The reason I started looking was due to this post I found on HSM
Bodi (mike alexander): I never gave up my preferred shares...Rufus offered to buy them in 100,000 million dollar blocks...there are other shareholders out there he promised $50.00 per share and up...within 6 months...I converted them prior to the 6-1 date...for obvious reasons...
See now we know that this isn't true. It wasn't until after things started to go south that the first mention of Mike converting his preferred to common in order to take over the company first came out. If he had already done it it would not have been mentioned.
GLTA Wally
Oh sorry no arbaic here
Posts: 3255 | From: Los Angeles California | Registered: Jan 2006
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quote:Originally posted by wallymac: Thanks for bringing that link up again.
I find it intersting because the company we are all talking about is Conversion Solutions, a Delaware Corporation, The bylaws that pertain are under this corporation and not the bylaws of FHAL. Read the following from the 10K that was filed.
Section 8. RESIGNATIONAND REMOVAL: Any director may resign at any time by giving notice to another Board member ,the President or the Secretary of the corporation. Unless otherwise specified in such written notice, such resignation shall take effect upon receipt thereof by the Board or by such officer and the acceptance of such resignation shall not be necessary to make it effective. Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the outstanding shares of the corporation at a special meeting of the shareholders called for that purpose, and may be removed for cause by action of the Board.
No where does it state that a private meeting by the shareholders committee had this authority. It says a Special meeting of shareholders called for that purpose.
I believe what we have is Mike and John using the bylaws under Furia/FHAL and not CVSU. I did go over to HSM because of Jenna's getting banned to see what may have happened but never got to that point. Someone reposted Mike's post under the name of BODI. He states that he believes that the merger can be undone, well that means that at this time the merger is still in force.
this maybe legal technicalities but as they say the devil is in the details.
CAT, the reason you won't find much on Romeo is because he is in Europe, and I believe always has been.
GLTA Wally
If, in fact, these are the bylaws of Conversion Solutions, then you may have hit on something more than a technicality. I recently posted the Furia bylaws related to Director removal believing that these were the same bylaws relevant to Conversion Solutions because of the buy-out. If the Conversion Solutions bylaws excluded that clause about "consent in lieu" then that would close the loophole that would allow shareholders to implement emergency acion without an official Special Meeting. If that is the case, we have a HUGE topic of debate. In essence, the type of shareholder action being relied upon by Arlitt would not be legally allowed.
Let's confirm that the bylaws posted by Wally take precedent over the Furia bylaws I posted earlier and the Consent clause is not in there as it was for Furia. I would love to apologize for the error.
Of course the question is moot if the merger was never completed. Could that be the almighty difference between the camps? It seems that corporate governance rules AND sharecounts may depend on this question - was the merger ever completed and is it possible to undo as a result of unfulfilled obligations? Clearly Rufus believes it was irreversibly consumated based on several comments on SPR. Thoughts?
quote:Originally posted by milliam: Dang Jenna...I didn't know you were one of the big Corps backed by big money. How about sharing a little of that with us .
I wasn't sure if he was implying that of me or not- that's hysterical.....
If I'm one of those big Corps backed by big money I think I will fund CSHD & get us the hell out of this mess!
-------------------- ..just remember....Family is EVERYTHING!! Posts: 3944 | From: Rochester, NY | Registered: Sep 2006
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posted
10, I checked your link out, it appears on the first page as RPH being ceo, the date is in july. If you click on cshd, it brings up "current" pr's . Check out the tranlation link from above. It is a cshd board from Kuwait, some of the wording sounds familar.
Posts: 360 | Registered: Aug 2006
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OTCBB issuers are not required to maintain current address or contact information with The Nasdaq Stock Market, Inc. or the NASD; however, this information is available for many OTCBB issuers. The Stock Summaries, available on-line, contains the trading symbol, name, and annual summary trading statistics for every security quoted on the OTCBB as of December 31st of the year you select. The summary also includes address, phone number, and company contact information when it is available. *************************************************
10, I guess they are not required to update it which is kinda dumb......If they were required to them maybe we'd know who the CEO was.....
Will the real CEO please stand up?......Anyone?
-------------------- ..just remember....Family is EVERYTHING!! Posts: 3944 | From: Rochester, NY | Registered: Sep 2006
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posted
Ok- really good night- I think I'm not going to be back until Tues....got a big weekend & a few doctor's appt.'s on Mon.....I'll miss you guys...(I know there a few people out there saying - thank goodness- she's outta here for a few days)!!!
-------------------- ..just remember....Family is EVERYTHING!! Posts: 3944 | From: Rochester, NY | Registered: Sep 2006
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10, Cat posted a link earlier and asked if anyone could speck arabic, I don't know why or how he found this , but I put the translation out there as an answer. Decided to read a little bit of it, entertaining. It's boardmembers talking on their version of allstocks.
Posts: 360 | Registered: Aug 2006
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quote:Originally posted by wallymac: Thanks for bringing that link up again.
I find it intersting because the company we are all talking about is Conversion Solutions, a Delaware Corporation, The bylaws that pertain are under this corporation and not the bylaws of FHAL. Read the following from the 10K that was filed.
Section 8. RESIGNATIONAND REMOVAL: Any director may resign at any time by giving notice to another Board member ,the President or the Secretary of the corporation. Unless otherwise specified in such written notice, such resignation shall take effect upon receipt thereof by the Board or by such officer and the acceptance of such resignation shall not be necessary to make it effective. Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the outstanding shares of the corporation at a special meeting of the shareholders called for that purpose, and may be removed for cause by action of the Board.
No where does it state that a private meeting by the shareholders committee had this authority. It says a Special meeting of shareholders called for that purpose.
I believe what we have is Mike and John using the bylaws under Furia/FHAL and not CVSU. I did go over to HSM because of Jenna's getting banned to see what may have happened but never got to that point. Someone reposted Mike's post under the name of BODI. He states that he believes that the merger can be undone, well that means that at this time the merger is still in force.
this maybe legal technicalities but as they say the devil is in the details.
CAT, the reason you won't find much on Romeo is because he is in Europe, and I believe always has been.
GLTA Wally
If, in fact, these are the bylaws of Conversion Solutions, then you may have hit on something more than a technicality. I recently posted the Furia bylaws related to Director removal believing that these were the same bylaws relevant to Conversion Solutions because of the buy-out. If the Conversion Solutions bylaws excluded that clause about "consent in lieu" then that would close the loophole that would allow shareholders to implement emergency acion without an official Special Meeting. If that is the case, we have a HUGE topic of debate. In essence, the type of shareholder action being relied upon by Arlitt would not be legally allowed.
Let's confirm that the bylaws posted by Wally take precedent over the Furia bylaws I posted earlier and the Consent clause is not in there as it was for Furia. I would love to apologize for the error.
Of course the question is moot if the merger was never completed. Could that be the almighty difference between the camps? It seems that corporate governance rules AND sharecounts may depend on this question - was the merger ever completed and is it possible to undo as a result of unfulfilled obligations? Clearly Rufus believes it was irreversibly consumated based on several comments on SPR. Thoughts?
...In My humble Opinion
Well, Humble. What I cut and pasted was directly from the 10KSB filed for CSHD with the SEC. IMO. The merger had to be completed. New cusip number, new company name and board of directors. New corporate bylaws from the state of Delaware. Fronthual was incorporated in Nevada and is in default with the state of Nevada.
quote:Originally posted by Ocqueoc: Okay guys, I would love to take credit for the translation,but I have to confess. My hubby found it for us
And to think ,Jenna, you were so proud of me.LOL
wow...but i thought the law doesnt apply to these people...so whats the point in explaining their actions...THEY should be the ones doing the explaining
Posts: 3086 | From: miami | Registered: Nov 2005
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quote:Originally posted by wallymac: Thanks for bringing that link up again.
I find it intersting because the company we are all talking about is Conversion Solutions, a Delaware Corporation, The bylaws that pertain are under this corporation and not the bylaws of FHAL. Read the following from the 10K that was filed.
Section 8. RESIGNATIONAND REMOVAL: Any director may resign at any time by giving notice to another Board member ,the President or the Secretary of the corporation. Unless otherwise specified in such written notice, such resignation shall take effect upon receipt thereof by the Board or by such officer and the acceptance of such resignation shall not be necessary to make it effective. Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the outstanding shares of the corporation at a special meeting of the shareholders called for that purpose, and may be removed for cause by action of the Board.
No where does it state that a private meeting by the shareholders committee had this authority. It says a Special meeting of shareholders called for that purpose.
I believe what we have is Mike and John using the bylaws under Furia/FHAL and not CVSU. I did go over to HSM because of Jenna's getting banned to see what may have happened but never got to that point. Someone reposted Mike's post under the name of BODI. He states that he believes that the merger can be undone, well that means that at this time the merger is still in force.
this maybe legal technicalities but as they say the devil is in the details.
CAT, the reason you won't find much on Romeo is because he is in Europe, and I believe always has been.
GLTA Wally
If, in fact, these are the bylaws of Conversion Solutions, then you may have hit on something more than a technicality. I recently posted the Furia bylaws related to Director removal believing that these were the same bylaws relevant to Conversion Solutions because of the buy-out. If the Conversion Solutions bylaws excluded that clause about "consent in lieu" then that would close the loophole that would allow shareholders to implement emergency acion without an official Special Meeting. If that is the case, we have a HUGE topic of debate. In essence, the type of shareholder action being relied upon by Arlitt would not be legally allowed.
Let's confirm that the bylaws posted by Wally take precedent over the Furia bylaws I posted earlier and the Consent clause is not in there as it was for Furia. I would love to apologize for the error.
Of course the question is moot if the merger was never completed. Could that be the almighty difference between the camps? It seems that corporate governance rules AND sharecounts may depend on this question - was the merger ever completed and is it possible to undo as a result of unfulfilled obligations? Clearly Rufus believes it was irreversibly consumated based on several comments on SPR. Thoughts?
...In My humble Opinion
Just so its known, there are several pages on the GSCCA.gov website that go over the bylaws and I believe they are the most recent.
Posts: 6410 | Registered: Jul 2006
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quote:Originally posted by Ocqueoc: Okay guys, I would love to take credit for the translation,but I have to confess. My hubby found it for us
And to think ,Jenna, you were so proud of me.LOL
wow...but i thought the law doesnt apply to these people...so whats the point in explaining their actions...THEY should be the ones doing the explaining
I have no idea what your talking about. I was talking about reading a board on cshd from another country and finding it "entertaining".
What actions did I explain?
Posts: 360 | Registered: Aug 2006
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I can almost hear this line spoken in Rufus's voice. Does this sound familiar to anyone else?
--allowing customers to track the progress of transactions and providing real-time status of activity Posts: 2308 | From: Michigan | Registered: Jun 2006
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posted
What do you guys make of this? Paul Poetter is the only person that was introduced by Rufus at the Dallas meeting. He was a major player in Waatle.
Originally Posted by poetter HERE IS A QUICK REPLY TO YOUR MAIN QUESTION, AND THEN I AM SIGNING OFF.
TO LODGE AN INSTRUMENT OR PLACE A TRANSACTION ON THE EUROCLEAR SYSTEM THE COMPONENTS MUST NOT ONLY BE WORTH OVER FIFTY MILLION USD, BUT THOURGHLY CHECKED OUT FOR IT AUTENTICITY AND OWNERSHIP. EUROCLEAR INSURES ALL OF IT'S TRANSACTIONS AND IT WILL NOT GO OUT ON A LIMB FOR ANYONE!!! SOMETIMES IT TAKES MONTHS TO PLACE AN INSTRUMENT ON THE SYSTEM AND MANY TIMES THEY FIND SOMETHING WRONG AND DECLINE THE DEAL. THESE INSTRUMENTS IN QUESTION ARE NOT TO BE CASHED IN, ONLY USED A COLATERAL FOR A PERIOD CERTAIN, FOR A CASH CREDIT LINE...ALL TRANSACTIONS ARE MADE WITH CASH, NOT TRADING INSTRUMENTS... ONE FOR ANOTHER.
THE COURTS OF THIS COUNTRY WILL FERIT OUT ALLEGED S.E.C. PROBLEMS AND WAGE THE WAR AGAINST THE NAKED SHORTING, AND HOPEFULLY CHANGE SOME LAWS TO PROTECT THE PUBLIC IN THE FUTURE.
EUROCLEAR, THE TRANSACTIONS AND ACCOUNTS ARE ABOVE THE USA LEGAL SYSTEM. OUR FED SYSTEM IS ONLY A SMALL PART OF THE INTERNTIONAL MONETARY SYSTEM OF WHICH EURCLEAR A MAJOR PLAYER. I HAVE POSTED HERE IN THE PAST ASKING THAT YOU NOT CALL THE EUROCLEAR BANK BRANCHES INVOLVED BUT MANY OF YOU DID...THIS RESULTED IN THE BANK MANAGERS IN THE EUROPE DRAGGING THIER FEET, CONCERNING THEIR DEPOSITIONS. THEY FELT THAT THEIR RULES OF TOTAL SECRECY FOR CLIENTS AND TRANSACTIONS HAD BEEN BREACHED BY CURIOUS AMERICANS. WHEN EVER A NON CLIENT CALLS A BRANCH THEY ARE TOLD THE SAME THING, "THERE IS NOT BANK OFFICER AT THIS BRANCH AND WE KNOW OF NO SUCH TRANSACTION." THEN THEY TRY TO PUT YOU ON HOLD WHILE THEY GET THEIR SECUTITY DEPARTMENT ON THE LINE TO ASK YOU SOME QUESTIONS. THIS PROCEDURE IS TO PROTECT THEIR CLIENTS AND A LOT OF THEIR CLIENTS ARE GOVERNMENTS.
AS YOU MAY HAVE GUESSED BY THE LATEST INTERVIEW OF MR. HARRIS, ON SUBPENNYRADIO.COM, HE IS BEING RESTRAINED IN THIS SPEACH ON SEVERAL SUBJECTS. I WOULD DRAW THE CONCLUSION THAT HE IS BEING RESTRAINED BY THE LEGAL BRANCHES OF THE POWERS THAT BE. THE WHEELS OF JUSTICE TURN SLOW BUT THEY ARE RELENTLESS...THE TRUTH WILL OUT. BE PATIENT. HAVE A GOOD WEEKEND.
-------------------- "If you go the Extra Mile there will be no Traffic Jams".
St. Matthew Posts: 885 | From: Dallas, Texas | Registered: Sep 2006
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Now, i understand that businesses move around so the address thing might not mean anything. So, i dug a bit further and I found this old post ragarding Plex Holdings and "Arnold Millman". Its a forum post so TIFWIW but at the end of the post the poster warns of him and his partner (potter). Coincidence?
I have had about enough disrespect to the Moderation of this thread and in the next 24 hours the decision will be made to close it down or keep it open. Unfortunately , due to a small number of people, who appear to have strong influence on this thread, it puts the site in jeaporady and it is not worth my time nor the freedom we have given members to respect what we offer. This has nothing to do with freedom of speech, but certain individuals whom i have begged to follow the rules and yet all I have gotten is a slap in the face for my trusting that he wouldl respect the Rules of HSM. I suggest you go RB OR IHUB who allow such garbage and have a free hand to slander whomever you wish. I am tired and worn out trying to be a mediator. It just doesn't work. We have a small group doing what they call due diligence. GIVE ME A BREAK!! You are in the stock, no matter what is dug up in public records or even to infer that someone has done wrong. You own the bloody stock, made your choice , now live with it because it is too late for this garbage after the fact. Let the FBI OR SEC do their job and not some half assed individual with an ego larger than life , who has basically ruined it for so many of you. I have had enough and you make your own decisions and no matter what, we or should I say MOI, will never be right. Live on the other side of where I come from for one day with this BS and see how long you last in this job. If it is my last message to you, it has been a slice. I am in the same boat as all of you, lost my investment unless something turns around , but the final straw was drawn this afternoon when i allowed a certain individual to return on condition. I was basically Fxxked. Sooo- long people if this is the last time i speak with any of you
Posts: 2308 | From: Michigan | Registered: Jun 2006
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No. He was the Agent of record. Anytime a company incorporates in a state they need someone that lives in the state who can be reached via mail. This Paul, is/was that person for Wattle. It is also not unusual that he is the agent for other companies. He, in reality is the human mail box for Wattle and any other company he is the registered Agent for. For the above post it does seem that he had some personal contact with Rufus and soes know more about Wattle than most Registered Agents would know. This is my understanding, if wrong I hope someone corrects me.
GLTA Wally
Posts: 3255 | From: Los Angeles California | Registered: Jan 2006
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Hedge funds are posting nice returns from deals that may involve ex-cons, stock scammers--even the Mob.
If your entrepreneurial venture were desperate for capital, would you get it from a hedge fund? Sometimes that's not such a good idea. Consider Laurus Master Fund. The Cayman Islands hedge fund opened with $5 million under management in 2001 and has grown to $1.6 billion making investments in so-called PIPEs, or private investments in public equities.
In those deals the fund invests in a cash-starved, thinly traded public company. In exchange it gets securities--notes that charge interest, warrants and options--convertible into common shares of the company. Laurus claims it has achieved an annualized net return of 18.5% since inception. The people running Laurus from New York--brothers Eugene Grin, 49, and David Grin, 37--are making out pretty well, too. In addition to the standard 2% of assets and 20% cut of profits, they also collect a closing fee, an average 3.5% of each deal, which they liken to points on a mortgage. As for the companies they invest in? Not so well. On average they lose 30% of their stock price within a year of signing a Laurus pipe, says PlacementTracker, a San Diego research service.
PIPEs are a big business, drawing $28 billion last year from hedge funds. Some of the companies raising the capital are large, but most are desperate indeed, too small or too weak financially to raise money with a public stock offering. Some of the hedge funds providing the money are not financiers that you would select if you had a choice.
Originally from Ukraine, Eugene Grin became a vacuum cleaner salesman when he landed in the U.S. in 1979. Then he worked as a broker of penny stocks, among other investments, at F.N. Wolf & Co., the boiler room shut down by regulators in 1994. At Wolf one of Grin's clients was Gilbert Bornstein, a 54-year-old unemployed man who invested $32,000 with Grin after being convinced he could safely double his money through penny stocks. (Grin says he never made that claim.) Bornstein was soon stuck with $27,000 in losses. Nine years later a New York State judge determined that Grin owed Bornstein $40,000. Grin has yet to pay that bill, and the judgment remains outstanding. "He was superwealthy," Grin shrugs, by way of an excuse. "There was money in the family."
Today Grin and his younger brother, David, still traffic in penny stocks. But they do so through PIPEs. Hedge funds love these deals because the shares they get are often priced at a discount to the market to compensate for the fact that they can't be traded until they are registered with the Securities & Exchange Commission, which can take months. Meantime, though, hedge funds can value those PIPE warrants and options pretty much any way they want and calculate their net asset value accordingly. The larger the gain in a fund's NAV, of course, the more attractive it is to new investors.
And the more attention these deals may draw from regulators. "Improper trading practices in connection with PIPEs is a concern," says David Markowitz, an SEC assistant regional director in New York. "It's an area that SEC enforcement is looking at." The feds have so far focused on the improper shorting of stock. It is mighty tempting for a PIPE buyer to double-cross the company it is investing in by shorting the company's stock and using the conversion privileges with the PIPE investment to cover its short position. That earns the investor a quick spread but wrecks the target's ability to raise more equity capital. Such shorting is forbidden by Section 5 of the Securities Act. In September a U.S. Attorney charged Hilary Shane, a former hedge fund manager, with insider trading, accusing her of shorting Compudyne's stock after learning that Compudyne was contemplating a pipe fundraising. On Jan. 4 Joseph Spiegel, a onetime portfolio manager for a New York hedge fund, settled SEC allegations of his using PIPE shares to cover short trades and paid a $110,000 penalty.
Andrew Worden, 41, runs Barron Partners, a $150 million hedge fund that has invested $85 million in pipes since 2003. The fund flogs its expertise in microcap companies. It doesn't promote the fact that Worden in 1994 pleaded guilty to wire fraud--he stiffed brokers on shares they bought for him that decreased in value--and served two years' probation. "I was 23 years old," Worden says of his indiscretions, which were not prosecuted for five years.
In March 2005 Barron Partners invested $1.5 million in Cordia Corp., a Winter Garden, Fla. Internet-phone outfit 54% owned by Alexander G. Minella, who in 1993 was sentenced to up to six years in prison. Minella, then president of broker Wakefield Financial Corp., pleaded guilty to having "secretly rigged the trading in certain Nasdaq securities" by getting brokers to trade among themselves to manipulate prices.
Corey Ribotsky, 36, heads N.I.R. Group, a handful of Roslyn, N.Y. hedge funds with $630 million under management. His first business partner successfully sued him for stealing away their marketing and consulting firm. The florist at Ribotsky's wedding filed a $7,275 claim against him for failing to pay the bill.
So how does he do as a hedge fund manager? A Ribotsky PIPE, on average, precedes a stock-price drop of 54% a year after the deal, according to PlacementTracker. That still works for Ribotsky because of the way he structures a PIPE: He receives debt securities convertible into discounted stock, in an amount determined by dividing the principal by the price of the shares at the time of conversion, less a steep discount. The further a stock falls, the more shares he gets.
Since Ribotsky invested $1.5 million in 2005, shares in Med Gen are down from $1 on the o-t-c bulletin board to a fraction of a penny. The Boca Raton, Fla. company had less than $1 million in sales from an antisnoring spray, diet pills and supplements. (Its biggest shareholder and chief executive is Paul B. Kravitz, the former president of AppleTree Cos., who paid a $25,000 penalty in 1996 to settle SEC claims that he failed to tell investors in an AppleTree offering that he planned to invest $250,000 in a gambling casino.) Ribotsky converted the debt into 171 million shares of Med Gen, at discounts of 40%, by September 2006. Did he sell his stake, triggering the stock-price plunge? N.I.R. lawyer Jonathan Schechter declines to say. "It is not us that makes a company lose its value--maybe a company hasn't executed its business plan," he says, adding that N.I.R. never shorts a stock.
One of Ribotsky's PIPEs, a $1 million investment in Roanoke Technology, a Rocky Mount, N.C. Web site designer, allowed N.I.R. to purchase newly issued shares at a discount of 50%; Roanoke's shares then traded hands on the o-t-c bulletin board at 12 cents. After Ribotsky sued Roanoke when it didn't meet its loan payments, Roanoke countersued, claiming that N.I.R.'s selloff of shares was destroying the company. Indeed, trading volume of Roanoke stock jumped from 180,000 to 2.4 million shares on the days Ribotsky's funds filed conversion notices, say court documents, and the stock price plunged to less than a penny. Both suits were settled. Roanoke chief David L. Smith Jr. ended up leaving the company and settling SEC charges in August 2006 that he improperly issued stock to consultants who sold them for $7 million and kicked back $4 million to him. Smith has been barred from acting as an officer or director of a public company.
When it comes to dicey partners, though, few are as accomplished as the Grins. They financed Francis O'Donnell, who has gotten to know the feds pretty well. Taking over as chief of Searchhound.com, an o-t-c bulletin board stock in 2003, O'Donnell changed its name to Coach Industries, quickly built up a controlling stake in the Cooper City, Fla. firm and started acquiring limousine companies. Laurus backed him with a $6 million loan. On Jan. 5 O'Donnell pleaded guilty to being an associate of the Genovese crime family. The indictment also claimed that an FBI agent posing as a drug dealer was asked to launder proceeds through Coach in exchange for a fee. In addition O'Donnell is accused of luring a victim to his office, where Clement (Clemmie) Santoro allegedly held a gun to his head and demanded a $1.5 million payment.
The Grins invested $1.5 million in April 2004 with Magic Lantern Group, which marketed Canadian educational videos. Their introduction to the company came through National Financial Communications, owned by Geoffrey Eiten, a Needham, Mass. newsletter writer who flogged companies and claimed to show readers "how to make 5,000%" on their money. Magic Lantern's biggest backer was Lancer Management Group, a New York City hedge fund that blew up amid accusations of fraud.
Magic Lantern, which lost $15.9 million on sales of $2.7 million in 2004, began to disintegrate. Eiten was sued in September 2006 by William Galvin, Massachusetts secretary of state, for engaging in "widespread 'pump and dump' transactions by publicly promoting certain stocks at the same time he was selling them." Galvin released chummy e-mails between Eugene Grin and Eiten's company suggesting they team up to sell Magic Lantern shares. Eiten denies any wrongdoing. Laurus managed to eke out what it calls "a nominal profit" before Magic Lantern's stock collapsed.
In November 2004 Laurus agreed to lend Thomas Equipment, which makes skid loaders and hydraulic equipment in Canada, $22 million to finance acquisitions and operations. At the time the stock traded at 88 cents. Most of Laurus' loans were convertible into stock at prices of $1.50 a share; the Grins also bought 2 million shares for a penny each and received options to purchase 4 million more for a cent apiece. Helped by a steady stream of press releases, Thomas shares touched $8.99 in January 2005 on light volume.
What was driving the stock? James Patty, former interim chief executive at Thomas and a current board member, says that David Grin was constantly focused on Thomas Equipment's share price, even though the lack of liquidity in the stock meant that Laurus could not sell too many shares without driving down the price. Word came down from David Grin, says Patty, "that he couldn't allow that type of hit to his portfolio." Why? "My assumption would be he was looking at a valuation of the company in order to attract additional money into his fund," Patty says.
Ridiculous, says Eugene Grin. The effect of Thomas' high stock price on Laurus' net asset value "was never material." His valuation model, he claims, discounts severely for the lack of trading volume in a stock like Thomas. A good thing for Laurus: Thomas Equipment's two main units have filed for insolvency in Canada; it was yanked off the American Stock Exchange and now trades for 8 cents.
Eugene Grin says he never shorts a stock. He also insists that Laurus provides a valuable service--and is more like a bank than a hedge fund. "We have tens of thousands of people working because of our investments," he says. "It's a beautiful thing."
posted
Wow Wally, thats some ugly stuff there. And i see Ribotsky is right in the middle of some of it
Posts: 2308 | From: Michigan | Registered: Jun 2006
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quote:Originally posted by wallymac: Yep. Smack dab in the middle of it all. If nothing else, some food for thought.
I know one thing, I will check into companies I plan to put money in to see if they have PIPE funding and then run for the hills.
GLTA Wally
I remember Kapone bringing up a big PIPE discussion on Paltalk and I hub back some months ago. He was bashed fiercly for it so i dont know what came of it.
Posts: 2308 | From: Michigan | Registered: Jun 2006
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