**FRANCOIS GOELO ACTUALLY TOLD ARRON ELSTEIN (WSJ)THIS**
.....................HE REALLY DID
"I then found out that a large portion of the 2 Millions shares shorted, were of the illegal "naked short" type, where there is no corresponding borrowing, no legal existence and no underlying Certificates. They were in fact pegging the share price by "issuing" new illegal shares (naked shorts) and artificially increasing the size of the trading float, which, I believe is between 3 and 5 Millions. The obvious solution was to call the CERTIFICATES on the threads: the response was overwhelming, from the long posters as well as large ZSUN shareholders. As a result, the short position has started to crumble and the stock moved from $7.25 to around $10.00."
ragingbull.com
By: Francois_Goelo
Reply To: 7996 by xcit Sunday, 15 Aug 1999 at 7:19 PM EDT
Post # of 22834
EXCERPT of an E-MAIL to Aaron Elstein, in reply to questions for his ZSUN Article...
Dear Aaron Elstein,
Just a question, off the cuff: is this an independent story, or an article "commissioned" by the Short Selling Bashers? (SSB's is coined by me, BTW).....
I have a wealth of information on this stock and you can even find my name on the first page of SI thread on ZSUN. I rarely fall in love with a stock at first sight, but within 10 minutes of reading about ZSUN, I knew it was a unique opportunity in which to invest. BTW, I "specialize" in Internet Asia, hence the thread created on SI: Internet Asia + Indexes.
I am willing to help you with your article, depending on your truthful answer to my first question and only on the basis of written exchanges, since "Words fly, Writings remain". So, until this is cleared up, here are just a few short answers:
1) What do I think of ZSUN? Here are a couple recent posts to give you an idea:
Message 10403226
Message 10405585
2) I do not work for ZSUN nor I am being compensated by it. I am a free lancing investor in equities and real estate and have retired from "active life" at age 31 to do what I please....
3) Conclusion, my opinion:
The SSB's operate in "Wolf Packs" (conspiracy of the shorts). The main ones get together and pick a stock that has had a good run up, little is known about it (so lies can be easily made up) and is not reporting, so that misrepresentation about its finances are a piece of cake. The alleged main actors with ZSUN are two Market Makers: John Fiero, currently under investigation by SEC and NASD for similar actions against PANAX (the story has been posted and I can let you have it) and Fahnestock. The others, realmoney, Auric Golfinger, jjs64, trader14U, etc... come in to bash the stock and scare away the Bona Fide investors and it usually works.
I have nothing against Shorting (livens up the markets), but everything against indiscriminate Bashing, stock manipulations and defrauding investors through lies, intimidation and misrepresentations. The stock overshot fair value when it went to $35.00, pre-split and was a fair short. But these guys were not content to make a reasonable profit and cover when it went down to $17.00. They wanted it in the Ground, like $2.00/share. They kept pushing for a month or so and only gained a couple points...
They had miscalculated: just at the time the shorting action started, ZSUN disclosed they'd bought Online Investment Advantage, OIA, which is an incredibly well run "cash cow" that should produce net earnings of around $5 to $7 Millions for ZSUN in 1999. This and strong resistance from the longs on the threads, SI and RB, put a floor under the stock at around $13.50 pre-split.
I then found out that a large portion of the 2 Millions shares shorted, were of the illegal "naked short" type, where there is no corresponding borrowing, no legal existence and no underlying Certificates. They were in fact pegging the share price by "issuing" new illegal shares (naked shorts) and artificially increasing the size of the trading float, which, I believe is between 3 and 5 Millions. The obvious solution was to call the CERTIFICATES on the threads: the response was overwhelming, from the long posters as well as large ZSUN shareholders. As a result, the short position has started to crumble and the stock moved from $7.25 to around $10.00.
I hear that Fahnestock contacted a number of large shareholders offering to buy blocks of shares at a premium, with little luck. Then ZSUN came out with the Law suit against "Stinky Stock DeFective" clearly demonstrating it wasn't afraid of going through the process of Discovery and that it had nothing to hide. This was followed by another Lawsuit against the Bashers for the alleged various misdeed they committed during that period...
All of the foregoing is my personal opinion, for my own use, bearing in mind I am a biased long in ZSUN...
Regards,
F. Goelo
(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)
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