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Microcap & Penny Stocks : Amazon Natural (AZNT)

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To: Arcane Lore who wrote (9215)	10/24/1998 8:45:00 PM
From: Arcane Lore	Read Replies (1) of 26163

An interesting account of another Regulation S offering can be found in a 1996 Business Week article. The company in question was Solv-Ex and the episode of interest begins with a purported short squeeze. As described in the article, in Feb., 1996 after Solv-Ex's stock had fallen by 30% in a short period of time, the company issued a "Notice to Shareholders" asking them to "request delivery of the Solv-Ex certificates from your broker as soon as possible". In this particular case, it apparently worked - at least to the extent that prices returned to their original level following some buy-ins of short sellers. The article then discusses Regulation S abuses such as shorting the Reg S stock to obtain a quick, lucrative and almost risk free profit. In the case of Solv-Ex: Solv-Ex, which has made heavy use of offshore offerings, recently disclosed that the Curacao-based GFL Advantage Fund bought 530,000 cut-rate shares in a Regulation S offering and then sold short in the U.S. a half-million shares--one-quarter of Solv-Ex' short interest--locking in a profit that probably exceeded $2 a share, or $1 million. (The filing says the short sale was conducted ''to hedge GFL's downside market exposure at the time.'') GFL was still short as of early July--in the midst of Solv-Ex' campaign against the shorts. The offshore shares have been registered for sale in the U.S., where they will further dilute the equity of Solv-Ex' hard-pressed shareholders. So Solv-Ex executives seem to be right. Short-selling is hurting the shareholders--though the problem is from Solv-Ex' overseas friends and not from home-grown short-sellers. businessweek.com For some inexplicable reason, the Solv-Ex story evokes a feeling of deja vu. Another chapter in the Solv-Ex story can be found at: sec.gov.

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