Repost, Yahoo: From Individual Investor Online, March 27th
Defending Actrade: Don't Believe what You Hear on the Net: Buy (3/27)
This will be our final update concerning the false rumors and propaganda
surrounding Actrade (ACRT). Actrade's management has
emphatically stated that the company's accounting policies strictly follow all U.S.
GAAP and FASB accounting guidelines. In order to be
selected as a Magic 25 stock, Individual Investor performed an extraordinary
amount of due diligence and found no accounting
irregularities.
Actrade is currently in a classic "bear trap," beaten down by short sellers using
the Internet to spread rumors and innuendo about the
company. After the dust settles and Actrade starts to trade on its intrinsic
fundamentals, the bears could get squeezed out, putting
substantial upward pressure on the stock.
Over the last few months, anonymous electronic tipsters have made a series of
what we believe to be unsubstantiated claims
regarding Actrade's accounting practices. As we've reported, we've not been able
to corroborate any of the short's claims. The latest
short seller is Key West Securities, an obscure Texas-based brokerage firm. We
tried repeatedly to contact Key West's Anthony
Elgindy regarding his concerns about the company. At a minimum, we hoped he
could at least provide us with a copy of his report to
determine his investment thesis. Unfortunately, our numerous phone calls have
gone unreturned and no report has surfaced.
We dug further into Key West and think investors should be aware of Mr.
Elgindy's dealings in the investment community. He is currently involved in a
high-profile spat with the Jordan Belfort, the former head of scandal-ridden
brokerage house, Stratton Oakmont
(Stratton Oakmont is under Federal investigation for it's "chop-shop" practices,
for allegedly hyping penny stocks, only to dump them at a high price on
less-than-savvy investors).
Belfort is said to be a minority investor in Key West Securities. More troubling,
though, is Elgindy's run-in with the NASD.
Last December, Business Week reported, "In September, Elgindy settled NASD
charges of alleged trading abuses by consenting to a
fine and one-year ban as principal of a brokerage firm." The article stated that
one of Elgindy's colleagues, Robert LoRusso, had asserted that "Elgindy
misappropriated funds and failed to disclose regulatory problems." In 1993, while
with another brokerage firm, Elgindy was involved in an aborted IPO that was
denied by the NASDAQ due to the prominent role played by a disbarred broker in
the deal. Though Elgindy escaped legal action, we believe the incident again
highlights the nature of his financial dealings.
We are in the business of picking stocks through old-fashioned fundamental
analysis and legitimate short sellers provide a valuable
service by uncovering overvalued stocks. But the relentless pounding of Actrade
by short sellers who hide behind aliases and offer no
evidence behind their opinions, is unfounded.
ACRT: Quote | Profile | Research
This Is a Reply to: Msg 4977 by delkil
View Replies to this Message
<- Previous
| Previous | Next | Respond | View reply to this message
Quotes - Chart - News - Discussion - $5 and Under
View SubjectMarks
Bookmark this Subject |
