Update: Baltia Air Lines, Inc. - No Such Thing As A Free Enterprise
stockpatrol.com
Investigative Reports
August 8 2006
The free enterprise system embodies the notion that everyone has the opportunity to compete and succeed. Society love aphorisms of achievement: "you can accomplish anything if you work hard;" "if you can make it here you can make it anywhere;" and our personal favorite, "anyone can grow up to be President" (provided you have multi-millions at your disposal).
Our financial markets espouse a similarly democratic ideal – anyone should be entitled to enter the public marketplace. The concept is noble and romantic – but perhaps outdated. If a business has no operations, no money, no revenues – essentially no hope – why should its proponents be entitled to seduce naive investors with fanciful tales and meaningless promises? If a company exists solely to peddle stock – not products or services – why should it be welcomed into the community of public entities?
Let's raise the bar, just a fraction, and require companies to demonstrate some sign of viability, even if they trade on the over-the-counter market. The criteria could be broad – existing operations, money in the bank, a viable business plan that can be independently verified. Give them a reasonable time period to implement their business and raise capital, and if they fail, deny the companies instant access to public investors. And, by all means, stop them from jumping from one business to another, and reverse-merging ad nauseum, constantly searching for a new story to spin. Just give investors a legitimate fighting chance.
These thoughts came to mind when we learned that an OTCBB company called Baltia Air Lines, Inc. (OTCBB: BLTA) recently registered 10 million shares of common stock on a Form S-8. The shares can be issued to the Company's officers, directors, employees and consultants. Since the stock is registered the shares may then be sold to the public.
Baltia has been hanging around for 17 years, saying it plans to initiate air service between the United States and Russia. There really is not much to say about Baltia Air since the Company has done little over nearly two decades, other than sing the same tired song. The Company has no planes, no airport rights – no elements of an airline. With virtually no money - $2389 as of March 31, 2006 - Baltia Air can barely afford a round-trip ticket from JFK to Moscow on existing carriers. The Company has given no sign that it is poised to take off – now or in the future. See, Baltia Airlines, Inc. - Not Russian Anywhere; Baltia Air Lines, Inc. — No Wings And A Prayer; Update: Baltia Air Lines, Inc. — Still Not Off The Ground; and The Plane Truth About Two Airlines.
Still, Baltia has qualified to offer its shares to an unwary public. The Company files regular financial reports with the SEC - which reveal its sorry state and lack of progress, so it qualifies for inclusion on the OTC Bulletin Board as well. It is a rather non-exclusive club.
Approximately 67 million shares of Baltia stock had been issued as of the end of 2005. After the latest Form S-8, the Company would have at least 77 million shares outstanding. With Baltia stock trading at approximately 7 cents a share, that gives this Company a market cap of almost $4 million. Remarkable, considering the Company's history of failed promises.
Why would investors pony up hard-earned bucks to own a piece of an airline that exists in name only? One thing seems clear, if someone is offering to sell something – be it stock, lottery tickets, or a piece of a lost Nigerian fortune – there is always a willing buyer. Baltia's flights of fancy have attracted enough naive investors to create a viable market for its shares. Bizarre, you say? Or simply free enterprise, the American way?
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