Here's an interesting wrap on SNMM from RB #109227
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All Longs! Here's the story of what is going on, based on what I've been able to piece together so far, and a little conjecture on my part.
Starnet is caught up in a larger political influence peddling scandal involving Premier Glen Clark. Peddling a "connection" with Clark was the responsibility of a social acquaintance of Clark, a small-time contracter, to help this small cadre of shady types to get a casino license in Burnaby (a suburb of Vancouver). This is not at all related in any way to the type of casinos that Starnet is involved in. Like many places, British Columbia has been liberalizing its laws relating to card rooms, casinos, etc. for the last several years. Local jurisdictions, along with the provincial government, assign licenses based on a point system that ranks prospective applicants.
At this point in its on-going investigation, which started well over a year ago, the police decided it was time to gather all the evidence it can, not only on the Premier, but also on any other officials, even law enforcement types who have been accused of being involved. Using a very large broom (i.e., a sweeping set of search warrants), partly because of the allegations of police corruption, the investigators searched the residence, cars, and businesses of all known properties owned by Steve Ng. Steve Ng owns a card room/casino that has operated for a couple years in Burnaby. A shady place, where drug dealing is alleged to occur, it's one of those operations that ordinarily would have been closed down in a minute. Though the gambling activity there is illegal, and yet well-known to the police, it stayed in operation. It alledgedly enjoys some sort of police "protection" (can you say "pay-off")?
What's this got to do with Starnet? I'm not entirely sure, but I do know that Ng also is/was a big investor in Starnet. He happens also to be an owner of No. 5 Orange Door, a well known strip joint near Gastown (not a bad one at that.) That's the place where many of the porn videos are made that are used on the porn sites owned by Starnet (the ones we've been impatiently waiting for them to unload). The search warrants even included the cars owned by Ng (a Mercedes and a Toyota van) and those of his cohorts. For some reason, which I haven't tracked down yet, the investigators included in their search the offices of Starnet and homes of several of its officers.
So now we've got a Starnet connection, through Ng and the No. 5 Orange Door, to this whole mess. It's easy to imagine how all these disjointed facts can get thrown into a reporter's computer, and voila! out pops a dicey political corruption/ gambling/pornography/shady casino/beyond-the-reach- of-the-law internet business/ shady characters story. We're seeing and suffering the result. And the Premier? He's toast this time.
As I've admitted, the facts cited above are combined with some conjecture on my part. Like all of you, I'm hungry for whatever I can learn.
Lastly, as a reminder, allow me to quote myself from last night (post 104486):
"SNMM's management team shares one important trait with all of us: they want to be stinking rich."
Now, given that Starnet's management team collectively owns millions of shares, do you think they would risk their futures as stinking rich guys by breaking some petty porn or gambling laws? Wake up and smell the roses. There has been no change in the fundamentals of this company. Its reputation, of course, has been dealt a serious blow, which may delay execution of an otherwise flawlessly-executed plan. Nevertheless, I expect Mark D. will respond to this latest crisis with the same composure and class as he did to the Levy crisis. After all, he's getting practiced at it.
PS: as many of you know from my posts last night, I leave Sunday for two weeks in Maui. Needless to say, this is not what I had hoped to be thinking about while on vacation. Now I'll have to bring my portable, just so I can get on-line to keep track of things. And, I get to ponder whether or not it's an honor to have been one of the last folks to buy SNMM at $13+ this morning, before I went to work (proof of my bad luck = post 104633). Turns out, the crash started just moments later; I enjoyed about 8 hours of ignorant bliss.
Oh, and one last thing: one of my several regrets is that my account is tapped out, so I don't have the funds to take advantage of what eventually will prove to be an incredible buying opportunity. Rats.
Oh, and another last thing: things could be worse. Given my enthusiasm for this stock, I'd be facing one helluva margin call had SNMM been marginable. How's that for finding a silver lining in a dark cloud?
Hang in there, and good luck to all of us.
(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)
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Strong Buy ? No way. |
