Archive
ISSUE 443: Finance
Napier International is a perfect model
for making a fortune through promotion
Tiny Surrey company has seen its stock value soar 700 per cent in past six weeks
BRENT MUDRY
news@biv.com
While Ballard Power Systems Inc. of Burnaby has hogged the headlines amid its surge to $150 a share, a tiny Surrey-based
company backed by several veteran Vancouver promoters and a controversial Swiss financier has been the standout star on
the Toronto Stock Exchange.
Napier International Technologies Inc. has seen its shares soar 700 per cent in the past six weeks, to a high of $1.49 on
April 15.
Napier has been steadily plugging away for years in development and sales of wood-coating and paint-stripping chemicals and
cleaners. Its current promotion is based on its
SV-35 stripper, which is apparently non-toxic, non-hazardous and fully biodegradable.
"As a replacement product for the toxic strippers the SV-35 series will have immediate entry into the chemical refurbishment
industry estimated to exceed several hundred million annually," chair Bradley Aelicks, a veteran Howe Street stock promoter,
stated last week.
After languishing in the 10-to-20-cent range on minimal trading volume for most of the past year, Napier shares suddenly
sprang to life in early March. The stock inched up gradually to 33 cents on modest volume before exploding on the upside on
March 25.
In the subsequent seven trading days, the volume has soared to a total of 5.7 million shares. This is especially impressive given
that the stock normally trades less than 100,000 shares a day.
While the Vancouver Stock Exchange, on which Napier rarely trades, often halts unusually active stocks that lack news, the
Toronto exchange has not interfered with Napier's heavy volume run. Ironically, last September, when the stock suddenly
surged to 40 cents, the TSE forced Napier to confirm there were no "material changes or transactions" to explain that price
spike.
Even more impressive is the lack of news behind Napier's current skyrocketing stock. The last substantial news was in late
January, when Napier announced a $314,000 financing, the latest in a string of low-priced stock issuances in the last six
months.
To placate shareholders and continue the promotion, Napier issued an extensive press release after markets closed on April
15, an upbeat recycling of mostly old news trumpeting the future success of its patented prime paint stripper, SV-35.
"Applications for the maintenance of aircraft, marine vessels, heavy equipment, bridges and other steel structures, oil rigs,
containment tanks, pipelines, railway cars and containers are a few of the significant markets already identified," stated Aelicks.
Napier was launched on the VSE in 1990 by a veteran promotional team, consisting of late Howe Street promoter Doug
McRae, controversial and secretive Zurich-based financier Carlo Civelli and geologist Mike Muzylowski, along with
co-founder Dr. Pavel Stovicek. Although Civelli was named Napier's European vice-president and has been a significant
shareholder, no regulatory insider records appear in B.C. Securities Commission files.
The company has been struggling unsuccessfully for years to post a profit, but its biggest payoff ironically came with the
unfortunate demise of Stovicek, who died of a heart attack a day after he was abruptly dismissed in an internal dispute in late
1993. Fortunately, the company collected a million-
dollar key-man insurance payout.
The current sudden stock rise comes amid a raft of newly minted cheap paper. Since October, Napier has issued more than
8.3 million shares, fully diluted, at 15 to 20 cents a share, to insiders, their associates, creditors and "arm's length" buyers. The
lucky holders of this cheap stock are now sitting on paper profits that make billionaire speculator George Soros seem like an
underachiever. Especially fortunate are a few creditors, who recently turned in $250,000 in debts for 21-cent paper. Civelli and
Muzylowski each surrendered debt of about $56,000, in return for shares now worth more than $350,000 to each.
While these shares-for-debt issuances and private placements in the past six months technically face hold periods of up to a
year, an earlier batch of cheap paper is free-trading. Napier sold two million shares, fully diluted, at about a dime each two
years ago to Aelicks, and a further three million shares, fully diluted, to two of his associates. The stock promoter's initial
investment of $100,000 reached a peak paper value of $2.86 million this past week, a modest 2,800-per-cent two-year return.
Insider reports note that Aelicks did not sell out too soon. In September, his last reported month, he held 879,000 shares and
one million warrants.
Napier CFO James Grinnell is less fortunate, with little cheap paper in his account. The accountant transferred all his
remaining 50,000 shares in February at 25 cents to his wife's spousal RRSP, protecting the current capital gain potential. In
January, he exercised options on 50,000 shares at 12 cents, then sold 75,000 shares at 23 to 26 cents. His remaining 75,000
12-cent options are now worth about $90,000 on paper.*
BEGIN NEW SEARCH
TOP OF PAGE |
