Why not defend yourself?
Simple, because if you're right, the shorts will get killed and the effort you expended in defending yourself will have been for nothing. Focus on managing the business. That's what good executives do. If they do it well, the shorts will disapper pretty quickly.
Another thing. If you're right, and the shorts are wrong, why not just show them the truth? In the case of AREM, a lot of the questions have come up because of some serious concerns over a contract with a Bulgarian state agency that may or may not exist. Shorts are taking this as a key to the fact that management is making things up and claiming revenue that they have never earned and haven't contracted for. But a contract is a piece of paper. Black on White. Why not just show it? "Here's the deal, here are the signatures, here's the name of the guy you can call in Bulgaria to confirm it."
AREM has done none of that. And virtually all fact-checking with Bulgaria, with the UN agency that is paying part of the bills, and with anybody else connected to the supposed deal has shown that the deal is either nonexistant, or at the very least worth a lot less than AREM is claiming.
When management has endless time to engage in bizarre stock manipulations, but none to answer fairly simple questions about their business, it's questionable. The defense in this case is quite easy to mount if AREM isn't lying. The fact that they're mounting any other defense suggests that they're trying to avoid the core issues.
I've seen this many times, often in "Wexler Stocks." Always the same. "Purchase Orders," "Contracts" or "Production Agreements" for large numbers, from unnamed companies, often in foreign countries where it is difficult or impossible to obtain any sort of confirmation. And rather than simply revealing the full details of those deals, managements that engage in endless tactics to shout down the short sellers who are questioning the dubious information.
mg |
