As usual, Musicguy is ill informed and passing on mis-information to fit his agenda. Here is the article in question, scanned and formatted to fit SI text. As you can see there is absolutely no mention of scams or wrongdoing. Rather, a story of a novice trading in the OTC with nothing to guide him other than bulletin boards.
Confessions of an Online Investor
One man took a virtual voyage into the belly of the bull market, picking up stock tips in one of the web's most popular message boards. The result: a Bear of a portfolio
By David Whitford
WHEN AN INDY race car, co-sponsored by a company called Children's Beverage Group, went up in flames during last summer's Atlanta 500 Classic, driver Robby Unser was not happy. Due Diligence, on the other hand, was pumped. Let me explain.
Due Diligence is the alias of someone I have never met. I really don't know much about him (or her?) either. Except that, like me, Due Diligence belongs to Silicon Investor (wwwtechstocks.com), one of those places on the Net where people go to trade ideas about stocks. Among the several digital message boards where Due Diligence posts is one devoted to the Children's Beverage Group (symbol: TCBG), maker of the "revolutionary, patent-pending' rip it sip it' drink pouch '" Someday for sure this stock's going to make a killing. When that day comes, Due Diligence will be looking at some serious capital gains and TCBG Win be known the world over.
For now, however, the company still has a low pro- file. Product distribution is spotty. Earnings are non- existent. No analysts cover the stock. No newspapers list it. Quotes are tough to come by ("unknown symbol" was the reply I got from Fidelity's electronic quote desk). Even the government is pretty much in
the dark. That's because TCBG is what's known as an OTC Bulletin Board listing. One of nearly 6,000 small stocks not traded on any formal exchange, and therefore exempt from many of the filings other public companies must make with the SEC. Maybe that's why publicity seems to carry so much weight with the tight coterie Of TCBG investors who hang out on the Net. Absent hard data, hype is all they have.
"Was watching the race in Atlanta," Due Diligence posted on Saturday night, Aug. 29. "Car caught on fire in the pits. Fuel-line leak. No one hurt and nice plug from announcers on the TCBG no-spill pouch."Eight minutes later, Steve Cox, another TCBG poster, chimed in excitedly: "Announcer's exact words after the fire: 'The Children's Beverage Group makes a nonspill drink pouch, but I don't think it's fireproof.' Great coverage. Too bad for Robby, though--said he had a great car."
I wish I could report that come Monday morning, TCBG'S share price rose like a phoenix from the flames. But that's not what happened. TCBG, it turns out, is a very troubled stock-not the worst performer in my portfolio, but close. In early August, I picked up 6,750 shares OFTCBG at $1.53. Eight weeks later, it closed at .81 That's more than one-third of my stake
gone up in smoke, $3,586 plus commissions, enough to cover the mortgage for two months, take my wife out for a week's worth of fancy dinners and pay the babysitter. But don't feel bad for me; save it for Due Diligence. I was playing with phantom shares. All I lost were my illusions.
For me, at least, it was a harmless experiments virtual excursion into the belly of the bull market, where talk is cheap, everybody's an expert, and maybe, just maybe, you'll ,find that overlooked penny stock that turns out to be the next Dell. My plan was simple: Hang out on the Internet message boards, absorb some wisdom, "buy" a few stocks, and see what happens next. I wound up losing $9,515 virtual dollars, or 36% of my portfolio.
I began as a Net neophyte should-by lurking, which is message-board-speak for reading what others have to say with- out contributing anything, myself. I paid visits to several sites
Including Silicon Investor, Motley Fool (wwwfool.com, or keyword "fool" on AOL), and the investing message boards on yahoo!, the search engine (messages.yahoo.com/yahoo /Business-and-Finance/Stocks)-before settling in at Paging Bull (wwwragingbuU.com).Why Ragging Bull? It's less than six months old; it's not as clubby as the others; it feels somehow less intimidating and, well, I guess I like the logo: a big red bull, snorting like Ferdinand did right after sitting on the bee.
In a Paging Bull folder called UNDER $4, 1 found plenty of the kind of fun stocks I was looking for: dirt-cheap, highly speculative, almost unknown to mainstream investors. (Paging Bull later transferred all my picks and many others to a new folder with a more descriptive name: OTC BULLETIN BOARD EQUITIES.) TCBG caught my eye right away. What's not to like? An appealing low-tech concept, a thrilling distribution plan involving Wal-Mart, a pending investment in new machinery, persistent rumors of a major announcement from headquarters, and a portentous ground swell of investor enthusiasm.
"This baby's gonna fly tomorrow!!!" a person known as gambler posted on Paging Bull. That was at 2:01 a.m. on Thursday, July 30. By the time I read it, over the weekend, I knew that gambler had lost his bet: TCBG had closed out the week flat. Did that give me pause? Maybe a little, but then I read what BIG-DOG had to say: "This will be the biggest week in TCBG history," he crowed on Saturday. "This coming week, we will finally get going on to much higher prices."
Monday morning, Aug. 3, 1 took the plunge.
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