An OPEN LETTER TO CNBC!!!!!!!!!!!!!!!( ididnt write it but it sure is pretty )
Dear David Faber,
I previously wrote to alert you about the pump and dump action in Amplidyne
(AMPD) to protest CNBC's contribution to the losses the trading public
would experience if they followed the momentum so enthusiastically covered
by CNBC. CNBC covered the runup to 16, but said nothing about the
subsequent collapse to less than 6, or the half-dozen ensuing class action
suits filed for fraud against the company.
Well, it the same scenario is playing out TODAY in Ariel Corp. (ADSP).
This stock was up from less than 4 to 11 today. In the aftermarket, it has
run to 17. CNBC has carried this runup with bemusement and enthusiasm at
least 10 times today.
I CHALLENGE YOU TO COVER THE STOCK'S COLLAPSE NEXT WEEK, WHEN THE AMATEUR
TRADERS WHO STAYED HOME TODAY TO TRADE GOT SUCKED IN AND SHREDDED THEIR
CAPITAL!!!
Or better, why don't you just do the public a real service, and at least
caution them Friday ?!?!
Here are the facts:
1) The company's product is a PC card which concentrates 96 conventional
modems (56K dialup and ISDN) on a PC card. IT IS NOT ADSL technology, and
IT IS NOT WIRELESS technology. (As was reported incorrectly at various
times on CNBC today.)
2) The news of the product is NOT NEW!!! IT was announced Oct. 18.
biz.yahoo.com
The market ignored the news, and the stock continued to trade for less than
$4 until yesterday.
3) Today's news merely announces the lab certification of the product as
telco equipment compatible. Without this routine certification, it would
not be saleable at all. It is not significant news in regard to the
company's ability to market the product or generate revenue from it.
4) The product competes with standalone routers made by companies like
Cisco and Lucent, but it is a card which must be installed in a PC. By the
company's own admission, the target market is small ISP's, just a fraction
of the market.
5) The company's PR overstates the price advantage of their product,
because it does not factor in the cost of the PC, software licenses, backup
and infrastructure costs, and programming.
6) According to representatives of ISP's I have contacted, this solution
is technologically inferior to mainstream standalone routers, and is
considered by them to be significantly less robust because a PC is in fact
serving as a router. (see below)
7) The company is in perilous financial shape, and is bleeding cash. In
fact, in its latest quarterly filing with the SEC, the company stated its
need "to raise additional funds to meet obligations through the next twelve
months. The company will seek to raise such amounts through a variety of
options including borrowings, proceeds from equity or debt financing and
scaling back operations..."
David, I urge you to tell the truth -- cover the story when the inevitable
happens -- at least as visibly as CNBC covered (and contributed to, with
its erroneous reporting) this excessive, ridiculous runup that will
inevitably rape the public. |
