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Technology Stocks : Escala Group, Inc -- Ignore unavailable to you. Want to Upgrade?

To: Robert T. Quasius who wrote (137)	6/6/2005 11:03:27 AM
From: Glenn Petersen	Respond to of 160

Thanks for posting the article. It did not appear to have had any significant impact on the share price for GMAI. The close relationship with Afinsa Bienes has its pluses and minuses. While it gives them a guaranteed supply of inventory, the fact that they are now a closely held and economically dependent entity limits their perceived upside. Those facts are reflected in the low PE.

To: Robert T. Quasius who wrote (137)	11/24/2005 12:20:12 AM
From: Glenn Petersen	Read Replies (1) \| Respond to of 160

In September, Greg Manning has changed its name to Escala Group, Inc. The new stock symbol is ESCL. ESCL was down over 5 points today on an article that appeared in the Wall Street Journal: Investors Are in the Dark at Escala By KAREN RICHARDSON Staff Reporter of THE WALL STREET JOURNAL November 23, 2005; Page C3 Coin trader Escala Group Inc.'s regulatory concerns don't appear to be small change, so how come investors aren't hearing about them? The company -- which is majority controlled by a closely held Spanish stamps dealer and is often referred to by its prior name, Greg Manning Auctions -- is being questioned by state and federal authorities as part of a wider investigation into allegations that money managers mishandled funds invested by the Ohio Bureau of Workers' Compensation. Escala and some of its bankers have received requests for information from Ohio Attorney General Jim Petro regarding the workers' compensation agency matter, according to a person close to the investigation. The company, which is based in New York and listed on the Nasdaq, also deals in a variety of collectibles such as art and sports memorabilia. Escala is also being pursued for funds by a court-appointed official in charge of liquidating Capital Coin, a now-defunct rare-coin venture that was one of the Ohio agency's money managers. "I would view this as an immense and gathering storm for Greg Manning," says William Brandt, the liquidator, who has also sent Escala a formal request for information pertaining to the company's dealings with Capital Coin. A spokeswoman for the Ohio Attorney General in Cleveland confirmed Mr. Petro's office is working with Mr. Brandt but declined to comment on the specifics of the investigation. A Department of Justice spokesman said federal prosecutors are also working with Mr. Brandt. An investor scanning through Escala's Web site, news releases or securities filings wouldn't know any of this, however, because the company says none of the discussions with authorities are "material" to shareholders. It continues to talk to authorities. "Escala Group has made all disclosures that are required by applicable securities laws," the company said in an emailed response to questions. "Escala Group has also complied with all information requests received from governmental authorities pertaining to the criminal investigations of Tom Noe," a reference to the former head of Capital Coin. Mr. Noe is under investigation by the Justice Department for his role in losses of up to $13 million out of $50 million invested by the Ohio agency in two Capital Coin rare-coin funds. (Separately, Mr. Noe, also a political fund-raiser in the Toledo area, was indicted by a federal grand jury in October on a charge that he illegally funneled money into the re-election campaign of President Bush. He pleaded not guilty and is free on a $350,000 bond. No trial date has been set in that matter.) Capital Coin did business with Spectrum Numismatics International, a subsidiary of Escala Group that was responsible for buying and selling the coins for the Ohio funds. Mr. Brandt contends that Capital Coin and Spectrum engaged in a "self-dealing" scheme in which Spectrum inappropriately marked up the price of coins it bought on behalf of the Ohio agency's funds. Mr. Brandt also alleges that Capital Coin made a $4.2 million loan to Spectrum "at entirely favorable rates," which he sees as a conflict of interest. "The damages here could be substantial," he says. Escala declined comment on Mr. Brandt's allegations, which he has made publicly in the media and in an interview with The Wall Street Journal. "The company does not believe it is appropriate to comment on matters involving alleged wrongdoing by unrelated third parties," it said in its statement. The matter -- now referred to as Coingate in exhaustive reporting by the Toledo Blade -- led the Ohio agency to review all its money managers. Last week it fired all 69 of its remaining money managers and said it planned to shift its nearly $16 billion portfolio into conservative fixed-income funds. Escala shares, meanwhile, continue to rise, and are up about 60% so far this year, bringing the company's market value to more than $550 million. Escala, which changed its name from Greg Manning Auctions in September, itself is majority owned by Afinsa Biens Tangibles, a private Spanish stamps dealer that also accounts for just more than 50% of Escala's revenue. Afinsa runs a European stamp-investment program that guarantees investors a 6% to 8% return and promises to repurchase stamps after a contract period. Stamp appraisers and other critics have raised concerns about Afinsa's financial ability to buy back or resell those stamps. But there are signs some Escala shareholders other than the Spanish firm may be starting to question the business: Out of 7.2 million Escala shares available for trading, just over 2 million, or 28%, are accounted for by bearish short-sellers, according to October data from WSJ Market Data Research