TO ALL: My little theory on how things (and the stock) went down.
With information I have recently become aware of I do think that many of the pieces are now comming together. What I am about to write is in no way compleat and is probably not compleatly acurate. Much more information will probably come to light as time goes on. But I do believe this is the gist of it. I don't mean to in ANY WAY imply that this is how it all went down. This is only my little theory on how all this may have happened based on information I have. This is not FACT. This is only a THEORY. Please do not take it as anything but.
The names have been changed to protect the innocent: Namely ME.
From being accused of slander. The names themselves were changed to protect the corrupt and slimy.
About a year ago there was a company called Software Under Exemption Inc, or SUXI. The company was barely afloat and was only kept afloat with the prospects of a shell takeover. SUXI (the old company) was shopping around the shell company to interested parties.
Those involved began to talk with some indaviduals who were developing a top of the line video conferencing product. These people had a company called ICU2 Infidelity Systems. They were marketing the product to the Federal government the best they could with the connections they had. At the time this product had to potential to blow away what was on the market at the time. The problem was those who developed the product had no way to bring it to the international market place. The management of Software Under Exemption convinced these indaviduals that they could implement a reverse take over, rase cash, buy out the old shareholders, have their own publicaly traded company and have their product in place and ready to market within months. They agreed.
All parties agreed that the current CEO (Marly Hottub) should stay on as CEO in order to rase capital and help the new management along untill the company was on it's feet. Hottub was payed a great deal for this service. He recieved $903,000 for "consulting services". Hottub then proceeded to implement a promotional campaign. He got OBC (a PR firm) to set up an account. Convinced DNA (a daily news letter publisher) to beggin to follow the company, with a promise of heavy promotion and a quick jump in the price of the stock. At the same time Hottub set up new market makers and contacted those he knew and asked them to promote the stock any way they could. He did so, to one firm, with a promise of maybe going through this firm when some private placements or stock offerings are neaded. Everything was in place.
The shell company "acquired" ICU2 Infedility Systems. The promotion began. DNA, OBC, and the brokerage houses involved began to promote, cold call, and HYPE. The stock quickly jumped and as it did shares were issued my the millions. Both to rase capital and to pay off those who were helping the promotion. As capital was rased the company began to work on the product. The old management of Software Under Exemption was slowly replaced with new people. The company payed some in cash but most in shares.
Within weeks the stock had run up, tens of millions of shares were issued, the old management was out, new fresh people were brought in and the company was marketing their product. All looked well. They had successfully transformed a shell company into new video conferencing company. Management was in place and the company had great potential. They acquired two other small companies, for what I feel are three reasons. 1) The products these two companies were working on had a great deal of potential. 2) There were some people in these companies or involved with the product who could retain positions in the SUXI. These people could realy help the comapny along in many aspects of the industry. 3) These acquisitions allowed the company to hide that fact that they issued so many shares for what some would call the wrong reasons. If anybody asked "where did all those shares come from?" they could say "you know those two acquired companies and some other STUFF".
The company was realy comming along. All involved felt as though this could be a very good company very fast. But then: There was a bump in the road. A brokerage firm that was involved with the company had a falling out with the CEO. Mighty Martty's Stocks and Stuff Inc. and Hottub no longer saw eye to eye. This firm had been issued quite a bit of shares for some "work" they had done with the company. Even a broker at this firm was issued a great deal of stock options. The situations quickly became personal. Ending with Hottub telling Mighty Martty himself to kiss off. Martty vowed revenge. He knew what had gone on in the company, and probably more then he should have.
Martty begins to sell the stock short. As much has he can any way he can. He realizes that he may not be able to do what he would like to do alone. So he makes a phone call. At the other end..... somebody by the name of Ferarri. Ferarri was a very well know short artist. Martty tells Ferarri that he neads a favor. He guarantees Ferarri that he will make money if he short SUXI. Ferarri agrees. The short is on. This realy worried Hottub. He realizes that he has bitten off more then he can chew. And he knows word of this will get around. He thinks and thinks and thinks.... nothing. He can't come up with anything at all.
After Mighty Martty and Ferarri have shorted millions of shares Hottub knows that he will soon be the target of share holder anger. He had issued tens of millions more shares that the trusting shareholders know nothing about. But the shorts do!!! He decides there is a nead for some major damage controle. " A share buy back" he says, "that's the ticket". So he announces a share buy back thinking that he will regain the trust of the shareholders. It does not have the effect that he wanted.
The stock begins to realy crash. The shorts are not letting up. More and more shareholders are wise to what is going on. Things don't look so good. On top of that... Hottub gets a call from the SEC. Things are realy bad. People are beginning to talk. He knows there were some things that he did early on that could realy come back to haunt him. Martty knows this, Martty's former broker knows this. So do several share holders. He is betwean a rock and a hard place. Only now does he realize that he is totaly inept, in over his head, and screwed. Shareholders are demanding explanations. A conference call is out of the question. Too many tough questions that might be asked. A taped set up crock of an intervew sounds much better. This way he can make it sound the way he wants. After all, it's his ass that's on the line. All the months have not careing about his shareholders have come back to haunt him. He has turned what could have been a powerfull army of supporters into what could become a powerfull army of dissenters.
The question is this: When all this crap is over. Will little ole SUXI come back. The potential is there. Others in management are without a doubt capable of turning all this around. Maybe the first step should be Hottubs resignation. There is a good man by the name of Agent-008 that could run this company well, for he is a good man. We will have to see... won't we.
-Leif |
