I posted this on RB but will repost here because it's important. I can't friggin believe I didn't see this back in May when ZSUN first dared put out "audited" financials on there web page. Again I have Francoise to thank for my rethinking this. He's always there for me when I need a bit of inspiration.
In the financials where they clearly showed that it was a reverse merger it says "On October 5, 1998, the Company completed an agreement and plan of reorganization whereby ZiaSun issued 2,565,000 shares of its common stock in exchange for all the outstanding common stock of MAI and MII. "
This struck me as very odd at the time. Usually in a reverse merger, the shell holders get a very small percentage of the new company, in this one they got 75%, even though the shell had no revenue, and a worthless $50k assett while Momentum had everything. At the time I attributed this to the fact they the Momentum guys were just that inept as businessmen, something they've shown time and again. Not so. Well ok, they're inept as businessmen, go no further than Asia4Sale to see that, but when it comes to the BB stock game, they're quite good.
How about if the Momentum guys already owned a big part of the shell they were reverse merging with? We know that Momentum registered Cragun.com, Ziasun.com, and ZSUN.com months ahead of the deal, and they had hosted the Bestway Usa web site even longer. If the Momentum guys directly, or indirectly through one of their offshore shell companies, bought shares in ZSUN, then there would be no reason to give Momentum a big percentage in the new company, they would just be giving it to themselves. In fact there would be a big disincentive, because if they issue new shares, then they would be restricted from trading for 6 months to a year(in this case a year), while the shares they already have will be good to go as soon as the Reg. S restriction is removed. Someone help me out here, what 90-120 days?
So all along the insiders in the company have been able to sell massive quantities of shares, from the first big pump back in March April, to the weaker summer one, through there shell companies. They should have no need to bail out on a comparitive small number of shares now, at a crappy price, when they have already ditched big big amounts at much better prices.
Now of course the longs will throw a fit over this saying it's all crap and i'm going to jail for having an opinion. LET ME MAKE THIS CLEAR. THIS IS NOT MY OPINION, IT'S A FACT.
S&P ZSUN data as of July 14.
D.S. Elder and R.W. Jardine each owned 7.8% of the Com.,Momentum Media Ltd. 12.8% (3,499,980 shs.) and Touchstone Transportation 9.2% (2,500,000 shs.)
S&P ZSUN data as of May 25, 1999
D.S. Elder and R.W. Jardine each owned 7.8% of the Com., Katori Consultants Ltd. 11.4%, Momentum Media Ltd. 12.9%, and PT Pasifika Prtama Investindo and Touchstone Transportation 9.2% each
Notice Katori went from 11.4% to off the list. Check the 10SB, you will find Momentum Asia head, Eric Montadon signing agreements on behalf of Katori. If he bailed out, then i'm sure other did to. That's probably why we see the strange name dropping, and weird cryptic posting on RB. Some of the insiders dumped big quantity and helped any naked shorts that were out there to cover, while other insiders did not.
This just shows the absolute greed of these guys, and the fact that they plan was to sell stock all along. I mean they could have reverse mergered 75% of the stock and kept 25% free and still done alright, and it wouldn't have looked odd. But noooooo, not these guys, they only reversed 25% and kept 75% free to dump, and by the time they divulged that back in May they had probably already sold big quantities that they really didn't give a damn if anyone knew or not. I bet they laughed their asses off that no one put together what they were doing. We all just assumed they were shorting againt their restricted shares like other scummy insiders do, but these guys had no need for that.
Of course since this is all offshore stuff, it's likely no one will ever get to the bottom of it, unless of course the SEC was snooping around in Vancouver where some insiders trade, or there was litigation where certain records might have to be produced.
Again, more than ever, Francoise is on the hot seat, since he was one of those making the cryptic posts on RB. He clearly knew the games being played by the insiders, but he kept cracking the whip on his loyal minions, urging them to buy, while his insider cronies sold. Man if the class action guys ever sink their teeth into this company they are going to have a field day.
CMB |
