Kingfisher,
I have mixed reactions to your post because on the one hand I am long and on the eve of a day that may result in my patience finally paying off, you post very negatively on DIET, which could discourage or maybe even mis-direct investor's focus. This is disturbing given the timing and it's possible motivation. On the other hand, I'm believe in truth and honest investing, so if that is your intent, I must welcome the post.
I would like however to offer the following observations in response to a few of the things you posted:
<<In looking over the posts on this thread I get the impression that not very many posters, if any, know the history of this company's stock nor do they seem to realize that there is another thread that has existed for some time at SI under the original symbol for this stock, SQSI.>>
Very true. The company has been quite silent for about a year as they underwent a major restructuring. As to the thread, the only one I ever saw (over a year ago as a lurker) had less than a dozen posts, so it wouldn't appear that this was a hot stock on SI.
<<SQSI went public around $6, in January 1997. They were either brought public by an investment banking organization (??) know as Sauceda & Granville or after the IPO hit the street that organization relentlessly touted the stock. It may be more correct to say the stock was manipulated and investors were cohered into buying shares by the likes of George Stambouli, who brokered for that organization. One of the ways that organization acted was to Fedex packages each morning with forms to sign for stock purchased but where some had forms to be signed for stock that was supposedly purchased the previous day but which was not ordered or agreed to by the customer.>>
I cannot comment about this as I know nothing of it. My first exposure came around November of 1997 and saw no evidence at that time of pumping--my recollection is there were a few press releases discussing major revenue growth. I was surprised when such releases stopped being put out during 1998.
<<Talk about a PUMP & DUMP deal! From January-to-July 1997 the brokers at Sauceda & Granville pumped like mad and from July 1997 to January 1998 they dumped like crazy until the stock got to the 10-20 cent region from $7.>>
Not that it matters, but the 10-20 cent region wasn't reached until late in 1998 according to my records. I purchased in May of 1998 at .32 and sold a week later for at .45. 90 days later it was at .25, and slowly continued downward. There is no question the IPO was at too high a price and when profits failed to materialize the inevitable happened. I never expected the lack of news nor the continued spiral downward that followed. However, I also didn't find out that management arrived in January of 1998 until the end of 1998. Sounds like a major shakeup had occured.
<<Unfortunately, IMHO, the founders do not seem to be remorseful enough for what had occurred because they have never attempted to let shareholders know what went on with the devastating collapse of their stock.>>
Not sure if a press release should be expected. Certainly an inquiring shareholder should have been told, and maybe they were. I didn't inquire.
<<It is possible that they may have even benefited from the drop in price.>>
Pure conjecture on your part.
<<The new management has tried to get shareholder approval for a reverse split and fortunately, they seem not to have been been successful, thank God.>>
I was told earlier this year that this was a 4 for 5 reverse split. This didn't and still doesn't sound like any big deal to me.
<<Further, one of their recent shareholder relations person informed me that they would be an SEC reporting company by June 1998. Did not happen!!!>>
I am aware of only one shareholder relations person, who has been in that position for at least 1 year, Jim Lafontaine. I can't comment on what you were told, but many micros are late on fulfilling promises. Maybe the news coming up will address this issue. I agree that it is a valid concern in general.
<<Now they are going to start putting out announcements every week and become a reporting company. Fat chance, as far as I am concerned.>>
We shall see. Based on their current website, they are clearly a valid company, and it looks to me like they probably have quite a few good, truthful, stories to tell. 600 clients, some good-sounding alliances, etc..
<<Doing DD is fine and dandy but is only worth it if you are hearing the truth from management and/or you can get you hands on SEC documents or professional audits, not internal comptroller spread sheets.>>
Truth and reporting are always 2 important items to me too. We will find out. Given all that is known and all that is NOT known it still looks like a good risk/reward situation to me.
<<If someone tells me that they have done a DD on this company, when SEC documents and informative news releases are no where in sight, I just cannot believe them...(other cautionary words)>>
I don't blame you. Believe yourself and verifiable information. The rest is hunches, which you choose to follow or not.
Thanks for your legitimate concerns.
Sincerely, Ted
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