From a post here below:
You traders, are you aware that this could be happening here? I never knew that side of a PIPE could be done. Was it not a similar transaction in November of last year, raising ~$20mm, dropping the pps to $2.20? Do any of you guys have any knowledge or experience with this, enough to determine how to proceed? How about the company counsel?
I have to caution that i dont want to be an alarmist, and create a ruckus over something that may or may not be happening, so I dont want to blow anything out of proportion, but it sounds like it could be done, and if so, may have started back then or even before. Where is that guy that blew the whistle a few months back, trying to warn about Arena's screw ups, stockguy87 or something?
Again, I dont want to be an alarmist, but I do want to turn over a few rocks and see if anything slithers out. Some hard questions may need to be addressed to the company management, again to see if they are aware, or may have something to say to address the fears and concern.
I am glad to see we have what appears to be an up day... the first in a long time. If it all turns around from here then great no problem, but if not, some of us should look into this, and maybe write a joint letter to IB or RH, or both.
Although regulations might have changed it doesn't mean that it not done.It also draws other short shops into the frey when they are aware of the news.Listed below is an old article from forbes.
How a tiny software outfit fell victim to an illegal but unrestrained practice known as naked short-selling.
Most investors have never heard of Sedona (otcbb: SDNA.OB - news - people ) Corp., a piddling Pennsylvania outfit that sells customer relationship management software for small U.S. banks and credit unions. But to a rogue band of short-selling hedge fund managers, Sedona was prime meat.
And so from early 2000 through 2003 Sedona shares gyrated wildly on the Nasdaq, crashing from $10 to less than a buck. Helping run down the shares were the brazen trades of raiders who later were accused of an illegal--but flourishing--practice known as naked short-selling.
In two civil cases filed by the Securities & Exchange Commission and in a criminal case pursued by the U.S. Department of Justice, regulators and prosecutors have pieced together a lurid tale of greed, replete with tape-recorded conversations of traders moving in for the kill.
Regulators are investigating dozens of other examples of naked short-selling and possible insider trading. Many of these deals involve companies that raised money as Sedona did, in so-called PIPEs, or private investments in public equities (see related story). A PIPE has the supplier of capital directly or indirectly getting newly issued shares at a discount. If the discounted pipe shares are a good indicator of where the stock is headed, the higher-priced existing publicly traded shares cry out to be shorted. Depending on who's doing it and when, those short sales may be verboten.
The case involves some key names: Ladenburg Thalmann, a New York City boutique investment bank that is a prominent player in the PIPEs business; Refco Inc., the now defunct brokerage investigated by the SEC for how its traders hammered at Sedona stock; and investment adviser Rhino Advisors, which helped line up investors in the Sedona PIPEs, including hedge funds Amro International, Aspen International and the Cuttyhunk Fund. In 2003 Sedona sued these companies and other defendants in federal court in New York; the case is pending.
...snip: see rest in 'what is it' thread
Oh the conspiracy theories... Instead of this line of thinking why don't you boys do a little homework to see the writing on the wall, especially after today's fluffy pr.. Here's 3 quick and easy elements that'll lead you to more fun. GCMI, AXSI, MaloneBailey. And ya wonder why mr. market doesn't like this ticker.. too funny. time to put down that big glass of kool aid and start sipping on some coffee to wake up your minds.
we should all really take everything you, and warn, a few others are telling us to heart while you are handing us the loaded gun and re#$%$uring that suicide is ok with the big guy.
beat it #$%$-wipe, you have nothing to offer that anyone here wants.
What exactly are you alluding to? You are raising questions about Bob Hussey's integrity? His competence? What? How mch did he have to do with business decisions or events at either of the Co's you mention? I feel, like a lot of investors on this board, that I was taken for a ride by Paul Arena and his promises and don't want to repeat that experience with Hussey. So, if you know something, spill it. And what the hell is MaloneBaloney?
I don't buy the hedge fund naked shorting theory, but I do think there could be individuals who would love to scoop this company up cheap, and with Hussey at the helm (as I stated last night whose interests are only aligned with the shareholders who got in when the market cap of the company was less than $125 million with the same # of shares it has now, i.e. the recent investors) they may see the opportunity to scoop up all or part of the company for less than someone like say Braiker might be willing to accept, whose interestes are clearly aligned with the shareholders from about $3 and lower.
I don't know why but I have this feeling that we need to get Braiker into the CEO role sooner than later.
I will respectfully disagree. It is one of the ways a PIPE shop can induce a fund to get involved in the first place. Please see the clip below form an article I have book marked.
Hedge funds constitute nearly 80% of the investors in microcap PIPEs, and the hedge funds invest in PIPEs because of the returns they can achieve. By using a strategy whereby they sell short the issuer's common stock promptly after the PIPE deal is disclosed, they are able to lock in the deal purchase discount (which, all in, ranges from 14.3% to 34.7%), as either a rise or fall in the issuer's share price after the PIPE would cause an increase in value of either the long or short position and a decrease in the complementary position.
To execute this strategy, the hedge fund must be able to borrow the shares to cover their short position. But since the stock of many PIPEs issuers is very thinly traded, the hedge fund may not have shares to cover the short position - a so-called "naked short," which while not illegal per se, may constitute illegal stock manipulation. (An SEC enforcement action against a hedge fund investor that engaged in a naked short in connection with a PIPE transaction can be found here.)
In my opinion, I believe the stock has been shorted, not in an attempt to ruin the company, but for some bad people to make money. I believe the clients of these PIPE shops do this ALL the time. Let me repeat, ALL THE TIME.
I wish I was wrong here.
Time is probably spent figuring out who held the 1M warrants with a $1.00 strike that exercised their shares and most likely dumped them into the market in the last quarter. That was most likely the reason for the heavy selling on some of those big down days.
I don't have enough facts about this to make a sound opinion but one thing that my experience has shown me in this type of stocks is that MANIPULATION is indeed always present both on the ride up and down. Hence why I invest for longer term to ride the waves and until the company's potential and fundamental as I understand them converge with price of the stock.
Sentiment: Strong Buy
"I don't have enough facts about this to make a sound opinion but one thing that my experience has shown me in this type of stocks is that MANIPULATION is indeed always present both on the ride up and down."
Then don't give us your "sound" opinion. It has been completely terrible since $4, and nothing you post is ever right.
Let me guess: in 3-5 years these small dips will be a blip on the radar because the stock will be bought out for billions of dollars. Right?
Augme is not being manipulated using naked shorting. It is too risky and unprofitable for a BB stock. There are about 450K shares short. No one will participate in this activity based on 450K shares. It makes zero sense. Maybe if we were talking hundreds of millions or billions. Not for scraps in an OTC stock.
AUGT went down because management almost BKed the company and management was replaced. The Street does not trust Augme. Period.
You are wasting your time pursuing this "theory" and "information".
flyers, I appreciate you weighing in, and I respect your opinion. This is not a 'theory' of mine, but i am trying to continue what some of you were discussing the other day in attempting to put some color on the stock decline, that many here have called disconnected, and that some have said should be trading at much higher levels... just to see what might make some sense. I have not committed to anything being the cause at this point. Just turning over rocks.