I have not been clear -- I am not encouraging passivity. In fact, previous posts have always encouraged productive, forward moving actions over hand wringing and moaning (at least, after one get this out of one's system). What is key is there is no way to draw conclusions or know which way to turn because of the mass of misinformation and propaganda here (other than to disinvest before GIFS stock trading was halted today).
Unlike you and others, I am not prepared to make accusatory statements such as "I see no reason to believe, much less support, a management team that...has feloneous backgrounds." Unless you have new proof of felony convictions by Mike Rhetorik, their attorneys or others in GIFs management, I cannot agree with guilt by association. Nor can I agree with "once a criminal, always a criminal" implications. Mohamed's past is a flag, something to remember in all my considerations. But, to jump all the way...I can't. It's your right to say this if you wish. While such a statement could very well be actionable if people in GIFS, I doubt they would.
Much of the rest of your comments express again the frustration we all have regarding GIFS management communications -- timing, content, etc. However, before I personally use this as a factor in concluding GIFS managed "lied or mislead," or that "the actions of management smell very bad," or to draw other significant negative conclusions, I had to do (and did) some review of what I had available to me -- SI/GIFS, PR and SEC docs. I tried to put myself in the shoes of GIFS management, as well as someone with disputed 144 stock, lawyers, average joe investor, market makers, and a broker who might be looking at GIFS. In short, I tried to look at both the forest and the trees.
1. The strategy of shadow forces behind the scenes focuses on gaining a better negotiation stance over GIFS. In their shows, I try for the same thing. I would unwind the strategy slowly over time as was done here. I would have focused on SI and other Internet communinities. I would blend strategic elemens into the background first, then work to make them largely self-sustaining. Give a push now and then. Looking at the records, this strategy seems to have leveraged off of posts here and elsewhere starting in late 1996 and early 1997. Expectations were set when "results" regarding auditors and CRIC drug on for a weeks. And those investors who sought a quick buck from GIFS and blamed the company, these people's dissatisfaction was amplified.
2. Communications by GIFS management has been, and overall, remains poor from the investor's point of view. However, expectations regarding company communications sometimes left a lot of be desired, and some used slow info response as leverage in building chaos, often claiming skepticism (which clearly was true for some) to continually question where was the info, what was management hiding, etc., or prompting others to demand answers. Clearly, the expectation was established that "delays in info = scam." There are instances in which numerous questions were asked on this thread, with some people MINUTES TO HOURS LATER asking what kind of scam was going on, why wasn't the company responding.
While there are many things a company should communicate to investors, there are many others that investor's have no right whatsoever to know at all or in a timely manner. Long-term shareholder value, not daily price moves are what management has to manage. Some people here took every little movement as a reason to bitch about shareholder value. I too was (and am) frustrated, but I kept (and keep) trying to see beyond today and yesterday. (Not easy to do.) Resulting negative posts were motivated by unrealistic expectations, frustration, impatience, and inexperience, as well as agendas among daytraders, litigants, market makers (yes, I have suspicions based on incomplete info that at least one poster was working for the benefit of MMs), and as yet others unknown.
In essence, the chaos builders used the increasing number of investors (many inexperienced investors who were often many steps removed in the past) using the Internet to flood GIFS with questions. Some did so professionally; others apparently did not. Like other small companies (only 2 of the 7 OTC/BB companies I've invested in handle communicating with investors well, and usually because they have setup Internet and other communications mechanisms). Clearly, GIFS was overwhelmed by demands for info. Without cutting out a significant part of the CEO's day, there was no way to answer questions, provide info and still be productive.
GIFS attempted to respond to this huge demand for information by creating a communication mechanism via their web site. Close, but no cigar. Events cut this effort short by a few days, again with delays and aborted attempts being labeled as lies from management, implied scams, etc. I suspect, if it proves to be true that Mike Rhetorik's 15 year old put the web site together, that GIFS made a VERY common mistake among companies using a web site as a dynamic communication mechanism -- they needed a pro to design and build it. Even basic sites can be a bear. Result: claims that management is hiding something.
3. The demand for info has intensified as part of an intelligent strategy, which included well-timed legal maneuvers, building chaos on SI and elsewhere, and apparently, convincing the TN government that it was not fulfilling its public duties. In March 1997 there were about 780 messages posted on SI. In April 1996, over 2600. And as you go through the messages starting in late January through the past few days, there is a consistent pattern. Why isn't management answering our questions? What are they hiding? At times, we got a few days of lull from this stuff - people productively exchanging and discussing positive information (with good skepticism). But never for long. Emotion-charged skepticism, claims, etc. etc. would start up all over again. Someone pulled a partial statement from somewhere and interpretted it so as to incite others. (Also, others asked real good questions without concluding scam, etc.)
One example is the bomb about Mohamed's criminal past. This was immediately challenged, with requests for confirmations, shared info, etc. J. Anthony and a few others had a good ol' time playing cat and mouse with it. It took many, many posts before real substance and not just a bashing claim was posted. And most interesting, this information had been known by several parties consistly bashing GIFS post after post, but it was when positive action from GIFS surfaced, however preliminary or tentative it was, that this revelation came out.
In addition, for the last month or so, any information from GIFS was immediately bashed. And the closer the CRIC sales came, the strong some of it became. Some called it fraud, others a scam, and overall, an atmosphere of distrust was built. Always, always, always, people increasing wanted to know why management was not answering their questions, what did they have to hide. The chaos builders did an excellent job of creating a feeding frenzy for info. And each new piece of info from GIFS was met with more distrust. The themes became "Prove it!" and "Show me the money!"
Putting myself in the shoes of GIFS management (and I have done crisis management), I had two choices: Respond to investors, or do something that produced results. Also, with more information than we have available to us, GIFS management saw a strategy being executed. From what I can see, and using my experience to fill in the gaps, Plan A (or maybe, phase 1) of the shadow force's strategy looks like an effort to flood GIFS management with so much demand on their time that they would be frozen, too indecisive and overwhelmed to act. I've seen this tactic used by one company to freeze up competitors. I've been in board rooms where such strategies and tactics were being discussed. What some people will do, ethical and unethical, for the $!
Unfortunately for the shadow figures, GIFS management didn't freeze up. They focused on "show me the money" (CRIC). Let the attorneys do their job about the lawsuits. As someone here noted, lawsuits are a part of business. For example, more than half of the SEC docs I've read as part of DD for other investment candidates have lawsuits pending. (Companies must report these lawsuits if they believe it is reasonable to assume a liability may come into existence.) One was because a manager in a company was coming back from his kid's ballgame (in his personal car) when someone hit HIM from behind. They're sued the manager's company for $5M, but the jury said, "We don't think so." Now, there's an appeal, and the plaintiff's attorney has filed two more lawsuits against the company. They're following the old legalism: Sue the one with the money whether they are at fault or not.
Bottom Line: Lawsuits are common. US is the most litigious country in the world. And lawsuits are one tool in strategies to negotiate a settlement or win a case, regardless whether you deserve it or not. And lawyering is about winning and losing, NOT whose right.
For GIFS, the lawsuits are too well timed and fit too well into the events. I would have timed these lawsuits too if I walked in the shoes of these lawyers. Timing is one element of a strategy for winning.
4. In GIFS management shoes I would have tried a conference call with investors (as suggested by someone on SI) so people could ask Mohamed some tough questions. Then again, considering the info frenzy, continued presence of intentional or unintentional chaos builders on SI and elsewhere disputing all info from GIFS, and other tactics being executed against me, in the shoes of GIFS management, I think I would have decided to focused on "proof" and "the money." I wouldn't let people with a counterproductive agenda (for GIFS and its shareholders) divert me.
Lo and behold, what was GIFS management doing when the State of TN stepped in? CRIC. The proof. The money. Ah, but wait, what on yonder door do I hear -- A wrecking ball. Plan B. Phase 2. Give it any designation you wish. Timing was impeccable. I don't know whether the TN officials were actual or defacto participants in this strategy, but overall it was played beautifully from the shadow figures side of things. From Internet-based overload tactics designed to create indecisiveness among GIFS management, they moved on to freeze out the CEO himself. Wow! Bravo! Well played.
I am impressed, but I am not happy. My investment is down over 67% since the State of TN assigned us shareholders a new CEO. BTW, I've mentioned I can afford to lose my investment, and knew this when I started. For those who simply must know, I have invested $2,607 for 1,750 shares (that's $1.49 per share). I'm sitting on $888.67 paper value as of the stock's halt in trading today. (Yo, Ms. Conservator, day late and dollar short, babe. Can you spell 'malfeasance'?
Am I mad at GIFS management? No. I am disappointed, but I can't think of anything that I would have done different walking in their shoes. The shadow figures' strategy is good, and as yet proven, maybe have included criminal breaking and entering and grand theft. (Whomever was behind this has me wondering what minimum wage boobs they hired, or how incompetent the cops in Chattanooga are. It would have been a lot better to steal the whole damn car and chop it up, and not just steal the briefcase. Come on, guys. This is not rocket science. Also, can you understand the equation No gloves = Fingerprints.)
After far too long of post, you now know WHY I've stated I will wait a few days to let things play out. There is far too much fog. Who do you believe? Me? You? Tonto? Julia? Mark R. (SAC)? Craig C.? Waaco, the ace reporters? We don't know whether there was some type of shorting going on. Some say yes. Others say no. The Federal Reserve says No for GIFS stock, but some professionals say Yes, it can be done by certain people. You see? The chaos campaign has been successful as far as I'm concerned. I do not know who to trust, and won't without more info and some proof. At times, I hear the shadow figures chanting "Hubba, hubba, hubba. Who do you trust?" (Joker, 1st Batman movie)
BTW, if you think I've defending management, think again. Try another label. I won't accept it. What I have and will do is use my business experience to understand what GIFS management could or should have reasonably done in light of the forces against them. Like you and others, I am being productive -- collecting information, putting myself in other people's shoes, and analyzing motives for the known and unknown cast of characters. I don't know enough to point fingers, to see the real picture in the puzzle.
This is what I call scenario building, and it helps me prepare for different contingencies.
And the adventure continues... |
