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Technology Stocks : VALENCE TECHNOLOGY (VLNC)
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To: Steve Hegji who wrote (9202)3/13/1999 2:23:00 PM
From: Bill Wexler  Read Replies (5) of 27311
 
A company will often hire stock promoters to tout their stock - particularly if the company is financialy shaky and relies on stock dilution as a means of obtaining cheap capital. The dilution is brought about by the use of "convertible debentures" which are often sold to overseas investors - at the great expense of small investors who bought in at much higher prices relying on the advice of the tout. This is a variation of the classic "pump and dump" fraud.

Hiring a stock tout is not exactly ethical, but it isn't illegal either...unless the tout does not fully disclose that he is compensated by the company. Touts are often paid in company stock - usually at a deep discount - incentivizing them to perhaps stretch the truth a bit at times. Touts have discovered that the internet is a wonderful tool for spreading hype, and if they are careful to hide behind multiple aliases there is little danger of getting caught (though that's quickly changing). Recently, Ron Reece was fined by the SEC for touting GRNO in this fashion. Unfortunately, Ron happens to be a particularly amateurish and lousy tout. I caught him again on the TAVA thread (another stock promotion scheme that I shorted).

It is glaringly obvious that internet discussion boards have been used to pass misleading and false information about VLNC in an attempt to entice small investors into buying its grotesquely overpriced stock.

Don't believe for a second that I simply picked VLNC out of thin air or that I toss the word "fraud" out lightly. I don't think Valence can remain a going concern for much longer, I think they are hurting for cash - and the lies are coming fast and furious.

VLNC is a full-fledged stock promotion fraud.
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