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Press Release Source: Phoenix Associates Land Syndicate
Phoenix Associates Issues Letter to Shareholders
Wednesday August 16, 2:18 pm ET
Recommends Shareholders Request Delivery of Shares in Certificate Form
NEW ORLEANS, LA--(MARKET WIRE)--Aug 16, 2006 -- Phoenix Associates Land Syndicate (Other OTC:PBLS.PK - News) (www.pbls.biz) today announced that Paul Alonzo, its President and CEO, issued the following letter to the company's shareholders.
Dear Phoenix Shareholder:
I will begin by thanking you for your continued support of PHOENIX. As a shareholder of PHOENIX, you know that we are making great strides forward in growing our company through acquisitions and internal growth, and we believe that we have set PHOENIX upon a successful course for the future. I won't even attempt to recap here all the key actions being taken; but, suffice it to say that, from our multiple business units and from our strategic initiatives to our tactical actions, I believe that we are on an exciting and highly rewarding journey. And, together, Phoenix and our shareholders are a winning team.
As you know, this past year has been challenging, but, we have met the challenges head-on and with your support we are confident of success. We are working hard to fulfill our promise of creating a strong, profitable, multi-faceted company with short and long-term value. I am happy to tell you that the entire PHOENIX team is fully committed to achieving this goal.
We would like your help. There is something that you might be able to do to help us, and in the process, help yourself. As you know, like many stocks on the pink sheets and OTCBB, PHOENIX has been recently trading at levels that are believed by most to be significantly below what we would consider fair value. Although general market sentiments about our company have undoubtedly played a role in the recent price of our stock, management believes that the current stock price is also attributable in part to heavy selling pressure from "short selling" of our shares in the marketplace and, some of this "short selling" may have originated outside the United States. Therefore, let me take a minute to explain "short selling" and what we think you can do to help.
Effect of Short Selling on a Company's Stock Price. In "short selling," traders sell stock they do not own by borrowing shares from a broker that must to be returned at a later date. If the stock price goes down, the short sellers buy stock in the market at a lower price, return the stock to the broker and make a profit. By selling first and buying later, short sellers benefit from stock prices going down instead of up. This makes their interest in our company directly opposite from what most of our shareholders want -- i.e., for the price of our stock to increase. If there is a lot of short selling, supply of our shares may exceed demand for our shares, causing the stock price to go down. In other words, short sellers can make money by selling enough stock short to artificially increase the volume of selling and drive down the market price. In the case of the "short selling" originating outside of the United States, it is possible that the "balancing shares," were not even properly borrowed from a broker. This is sometimes referred to as "naked shorting."
Short Sellers Borrow Stock from Shareholders Like You. Where do the traders get the stock to borrow? Ironically, whether you know it or not, they probably have been borrowing shares from shareholders like you. If your shares are registered in your broker's name or in "street name" instead of yours or are held in a margin account, your PHOENIX shares may have been loaned out to these "short sellers." In other words, if your PHOENIX shares are registered in your broker's name or being held in a margin account, your shares are available to be loaned out to short sellers. So, while short sellers are borrowing your stock, they are actually working against your interest in seeing a higher PHOENIX stock price.
While many companies experience short selling in the marketplace, we believe the amount of short selling compared to the trading volume in our stock may be unusually high. Our financial advisors believe this may be adding downward pressure on the price of our stock.
How Shareholders Can Help Combat Short Selling. To carry out short sales, traders need to borrow stock that is registered in "street name" or held in a margin account. However, if enough stock is taken out of street name or margin accounts, short sellers will have difficulty maintaining the current volume of short sales. Therefore, we are asking all of our shareholders to do the following:
Promptly call your broker and have your PHOENIX stock issued in your name and delivered to you in "certificate" form for your own safekeeping. Or, at a minimum, have the broker issue your shares in your name and hold them at the brokerage firm in safekeeping, if your broker is among those that offer this service. Holding your own shares in certificate form is the only way in the trading markets of today that you can be fully assured that you hold "real" shares of stock and not counterfeit shares that may have been created due to the rash of naked short selling that appears to be prevalent these days. Your ability to hold or sell the stock would not change.
What would change? A short seller would not be able to borrow your stock for short sales without your permission. So long as the stock is registered in the broker's name, the broker is the legal owner of record, and can lend your stock to a short seller without your permission. Similarly, so long as you have your stock in a margin account, it is available for loan by your broker. If you have the stock registered in your own name and held at the broker or in your own safekeeping, brokers will not be able to do this.
Would there be any downside for shareholders in having shares registered in their own names? From an economic point of view, the answer is no -- nothing will have changed. The only difference would be administrative including some possible paperwork and expenses you may incur in having the shares put into certificate form and delivered to you. When you decide to sell, if you had your shares transferred to your own name and delivered to you, you would have to send your certificate back to the broker with a signed "stock power" and instructions to move the stock back into street name. We think this is a small price to pay for relieving the heavy short selling pressure on our stock.
When can shares be taken out of street name? You can seek to take shares out of street name at any time. However, because of the apparent heavy short selling pressure on our stock, we believe that your immediate action would be desirable. Accordingly, we are asking our shareholders to call their brokers to have their shares promptly taken out of street name and them issued in their own name and delivered to them in certificate form.
The company intends to work with its transfer agent and shareholders to make the process of re-registering your shares for delivery to you in certificate form as quick and easy as practicable. If you have any questions about this process, please contact Mike Mulshine at 732-292-0982, and he will be happy to assist you.
As I set out above, the company has undertaken a number of recent initiatives to better position us for the future. As a shareholder, you can help. We appreciate your consideration of this important matter and thank you for your continuing support of PHOENIX.
Sincerely,
Paul Alonzo
President and CEO
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