Marty,
In follow up to my post #1990:
On 6/25 Tsig filed form S-8 informing us that Mr. Gordon sold 6,480,000 of his personally owned shares. This is an undisputed fact. He did not loan them. They were legally sold.
Mr. Gordon's sale raised considerable concern. Why would Mr. Gordon sell 65% of his personally owned TSIG holdings at a time just prior to the launch of the CCI website?
On 6/30 Beebs and Gambler asked this question of Mr. Gordon during their CC. Mr Gordon explained that he did not sell his shares on the open market He stated that he sold them to a private investment group in order to loan the proceeds to TSIG. He also stated that the private investment group was restricted from selling the shares into the float and that by agreement they were holding the shares for resale back to Mr. Gordon at a later date.
As of this post, there is no way of verfying the truthfulness of Mr. Gordon's claims regarding the sale of his shares. There are however factors that when honestly weighed cast considerable doubt on the accuracy of Mr. Gordon's statements.
A)The big drop:
On May 8th the first day that Mr. Gordon became eligible to begin selling the 7 million shares that he had registered for sale, TSIG share price tumbled on heavy selling pressure. The stock price had been steadily rising throughout the week due to investor enthusiasm over the 4/30 press release announcing the "completion of the acquisition of CCI"......However the high of just over .70 reached that Friday May 8th quickly crumbled under the wave of a massive sell off.....A sell off that continued to keep downward pressure on the share price for ensuing weeks thereafter.
Was it just mere coincidence that Mr. Gordon gifted himself
7 million .15 shares on 4/23....Issued the CCI press release 4/30....Registered the shares for sale on 5/8...and then on this very day the day he could legally begin selling his shares TSIG's rapidly ascending stock price plummets on high volume?
...It is if you believe Mr. Gordon.
B)The profitless sale:
Mr. Gordon also claims that the proceeds of the sale of the 6,480,000 shares were loaned by himself to TSIG under the arrangements of the 5 million revolving credit facility that he had put in place between himself and TSIG on 4/23/98. Is it reasonable to conclude that this is a true statement.....Consider:
The $5,000,000 note between Mr. Gordon and TSIG specifically states "at no time shall the aggregate obligation of borrower to lender exceed one million U.S. dollars" Thus for Mr. Gordon's statement to be true he would have had to have recieved no more then 1 million for the sale of his shares.....Is this reasonable?
Mr. Gordon's option to acquire the 6,480,000 shares were at a cost to himself of $972,000, before associated expenses...Is it reasonable to conclude that Mr. Gordon would exercise his option on .15 shares to sell them at .1543, generating a mere $28,000 preexpense profit, at a time when the open market share price was well over .50 a share and climbing?
......If you believe Mr. Gordon it is?
C)The odd share amount:
Mr Gordon states that the 6,480,000 shares were sold to a private investment group. If this were true...why such an odd number?..Mr. Gordon registered 7,000,000 shares for sale. Why did he not sell all 7 million.....or perhaps 6,500,000?
When dealing with numbers in the millions it is rather unusual that a negotiated deal would involve such an odd number.
6,480,000 shares is a number much more in line with sale increments in the 10,000 to 20,000 range that combine to equal such a figure.......In fact the new S-8 registration filed 6/25 which allows Mr. Gordon to sell another 7,000,000 shares also re-registers the left over 520,000 shares that Mr. Gordon was still in the process of selling.
Is it reasonable to conclude that Mr. Gordon and an investment group choose the number 6,480,000 shares?
.....It is if you believe Mr. Gordon.
D)Lack of a proper SEC filing:
Mr. Gordon states that he sold the 6,480,000 shares to a private investment group. If this is true where is the SEC filing?
SEC law requires any person or entity to file form 13D when 5% or more of a company's outstanding shares are acquired. Once 5% is reached form 13D must be filed within 10 days. The filing includes the names of all individuals involved in the investment group. They also must describe all recent buying or selling activity as well as their purpose in acquiring such a large interest. Thus if everything is as Mr. Gordon claims that it is, we should have seen a filing at the very latest by Monday 7/6 describing the sale and verifying the restrictions of resale and commitments to hold shares for a future sale back to Mr. Gordon.
Is it reasonable to conclude that a private investment group has chosen to ignore this vital SEC filing requirement?
.....It is if you believe Mr. Gordon.
E)S-8 inconsistancies:
The S-8 filing on 6/25 specifically states that none of the proceeds from the sale of Mr. Gordon's shares would be recieved by TSIG. This is the same language as the 5/8 filing.
The filing also fails to support Mr. Gordon's claim since it does not mention that the 6,480,000 shares were sold to a private investment group with restrictions on resale...Language that would have been included if it were true. The legal firm that prepared the S-8 would have access to all the specific documentation and would be required to disclose it by virtue of the fact that 6,480,000 would make such a private investment group an insider with well over 10% of the outstanding shares. In fact they would be the single largest shareholder!
Is it reasonable to conclude that the legal firm omitted this vital and material information from the S-8 by mistake, or perhaps on purpose in order to mislead other TSIG shareholders and potential investors?
....It is if you believe Mr. Gordon.
Consider another possibility:
Mr. Gordon gifts himself 7,000,000 shares at .15 a share on 4/23. One week later on 4/30 Mr. Gordon issues a somewhat misleading press announcing the "completion of the acquisition of CCI"...knowing that such a release would be met with investor favor certain to rapidly move TSIG stock price higher. Mr. Gordon then registers the shares for sale on 5/8 and immediately takes advantage of the mania that is fueling the rise in share price by selling shares in blocks of 10,000 and 20,000 shares on the open market. Pushing share price down in the process by flooding the float with over 6.000,000 shares over the next few ensuing weeks. Pocketing a cool $2.5 million profit on a best guess estimate of an average sale price in the mid 50 cent range.
Which scenario best fits the evidence?
Is it important whether or not Mr.Gordon is telling the truth?..Does it make a difference if he did sell his shares into the float on the open market?......Most certainly it does!
If Mr. Gordon sold 6,480,000 shares on the open market once ....he is likely to do it again. Based on the 6/25 S-8 filing Mr. Gordon is eligible to sell an additional 7,520,000 shares. He is allowed to sell them into the float if he chooses to do so. Has he done so?
Was it just by coincidence that the website mysteriously appeared and the information regarding it was communicated to the thread?..Certainly such a major event of the unveiling of such an impressive and promising site was certain to drive up share price during the speculative mania that would no doubt ensue......Such did prove to be the case.........However a similar pattern emerged. A seemingly unexplainable sell off in the face of wild exuberance. Could this have been the clever Mr. Gordon at work....once again manipulating news and events for his own gain at the expense of the investing public?..........Judge for yourself.
Of course we would not need to make such a judgement if Mr. Gordon would see to it that the SEC form 13D is promptly filed verifying his claims as true......Also, since the qtr. has ended Mr. Gordon could make disclosure prior to the next 10Q filing of the amount of the outstanding loan that TSIG owes Mr. Gordon on 6/30.
Proof of the truthfulness of his claims squarely rests on his own shoulder's......Mr. Gordon, we are waiting!
Marty, My next post will deal with Mr. Gordon's claims regarding his involvement with "Phoenix" and it's recent bankrupcy. Information that you will find to be very interesting, as well as at odds with Mr. Gordon's statements and claims.
Best Regards, JAB |
