I understand your perspective is different. That's the root cause of our clashing so often, I am sure.
And of course, I have a vested interest where you do not.
Their announcement did seem to follow what you thought they may have said....you follow the company fairly closely and I have noticed you know more about it than people who do not keep a close eye on it....did you know they planned an acquisition? I did know, but I don't know for certain who. Perhaps Universal is the company but if that's a guess on your part it's no worse nor better than mine. I "don't ask" and even if I knew, I "don't tell."
What you say about the implications of a buyout of Universal seems viable. On the one hand, you say these guys are smart enough to pull off structuring a scam over two years culminating in the buyout of another firm to keep the issue going ... perhaps ad infinitum. Yet Hagen is not bright enough to leverage 20 million in DHMG stock (current prices) to skip town.
On the other hand, for all I know this is also possibly a tried and true method for corporations to defer taxes in that they acquire another firm to reduce a tax bite.
As I have said....I have a corporate lawyer I use for business agreements, an accountant for tax planning. This field is not one I choose to understand, I know a Corporation Chairman that can explain the intricacies of very specialized accounting. He learned it over the past ten years for his job. 40 years ago he was a Chemical Engineer. 20 years ago I was an engineer. I still don't `need' to understand how one might prepare for tax consequences by allocating funds to legally avoid tax consequences.
I know I rambled with that. But my experience has been, if I just tell you "I don't fully understand it", you might get upset with me so I tried to come up with a way. Perhaps I should have just said that in the first place but you must try to understand. It is nothing personal. I listen to my attorney...I listen to my accountants. But this does not mean I have to fully understand every thing they say.
As for insider selling, I presume you are focused on Dave Hagen. I just went through my file and I note the following transactions. Hagen filed a 144D in the first quarter to sell and subsequently sold 20,000 shares of restricted stock. In the second quarter he made purchases of around 30,000 shares. If I recall correctly, you mentioned he sold ~30,000 in the third quarter. So the net effect is that his second and third quarters canceled and he has sold 20,000 shares sum this year. The sale you referred to ---again, hazarding a guess--- was against stock purchased through borrowed funds in the second quarter. That is to say, perhaps he carried a personal liability (financial debt) for the purchase of those shares and for personal reasons decided to pay it off. Just a guess. Why insiders buy and sell is technically a personal issue and I don't wish to speculate on it for that reason.
The stock dividend spin-off was something I was not aware of and presumably has been used by other companies, legitimate and perhaps not legitimate, in an effort to make it difficult for people who maintain a large short interest in the stock. I agree, the most it will probably do is make it difficult for the 3 primary short positions.... however, why not make it difficult? What I think you are trying to say is a legitimate company would not do this. I don't think that's so but I don't think we'll find an example because it would be up to you to tell me one. Your field is small caps and BB stocks, not mine. For me it would be as obscure an issue as, say, watching PREM movement or knowing historical probabilities while trading the S&P futures would be to you.
Finally, as far as Mother Theresa's in the NASD....I've had experience with some while trading NASDAQ.....I have a network of friends who warn me off others. I know these guys are not the worst.....but we're not talking Goldman Sachs or Morgan here, either. Likening these guys to Mother Theresa is a fairly stiff insult to her memory. |
