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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Roger A. Babb who wrote (15373)	11/11/1998 10:12:00 PM
From: RockyBalboa	Respond to of 18691

I have sent a question about GKI to a guy named mad2, who engaged in short-selling GKI earlier. He did not respond so far. GKI has only one product which has still to be finished. Named "Around the Web in 80 Minutes" and allegedly presented at the comdex. See: biz.yahoo.com Some quick numbers (ugly enough) Shares out: 29.2m Market Cap: 239.2M Revenues: Nil Book 0.14 Cash 5.24M = 0.19/Sh Earnings: -0.34 52wk: 19 7/8 / 0 3/16 Shares shot: 1m In August one of the founders of GKI jump off ship, along with a handful former compaq emplyoees and the stock went down to 0 3/16. Also a Mr Ben-Dak, known from touting Turbodyne, engaged himself in selling GKI stock, fueled by his former 2.5 M shares holding (ple-reverse split 1:10), Accorsing to the last 10ksb, Mr Ben-Dak still has 200.000 exercisable option worth (at least $1,1 M). In the whole, a company with no product,no marketing plan, tons of stock options exercisable (and most of the compensation comes from), a sheer endless list of planned sales, definitely a T3. A word about impending dilution, taken from the 10KSB: "In August 1998, the Company entered into a one year consulting agreement with John Paul DeJoria whereby, the Company agreed to compensate Mr. DeJoria in the amount of $50,000, and Mr. DeJoria purchased 1,000,000 shares of Company Common Stock at $.05 per share. The shares are subject to repurchase by the Company at $.05 per share in the event of Mr. DeJoria's failure to perform or early termination of the agreement. Under the agreement, the shares vest at a rate of one-twefth per month, and the vested shares are no longer subject to repurchase by the Company. Problem is, with no real sellers in the market, they can drive the stock to the moon. Finally the list of planned sales filed this year, and not yet consummated is longer than your thread and numbers more then 500k shares. DeJoria shares are not registered yet. By luck, I sold a small short position 2 minutes before the close at 8 3/4 which was the days high. C.

To: Roger A. Babb who wrote (15373)	11/11/1998 10:41:00 PM
From: RockyBalboa	Read Replies (2) \| Respond to of 18691

Roger, some more points GK Intell.: They lie in their statements: On Sept 8th they stated that: "We ended our relationship with Dr. Ben-Dak and re-focused from the international to the domestic market concurrent with Rod Canion's election to the Board. Dr. Ben-Dak subsequently sold his stock at a below-market price of $1.50 per share on April 17 as part of a private placement. " (http://biz.yahoo.com/bw/980908/gk_intelli_1.html) WRONG: The 10-KSB issued in August reads that MR Ben-Dak still holds 200.000 (new count) execisable options. Or: "Furthermore, the $2.8 million of management salaries cited in the article primarily included grants of restricted stock options and restricted stock for the fiscal years 1997 and 1998, none of which have been exercised or sold. Of that $2.8 million, the actual cash compensation totaled less than $450,000 over the two-year period." Caution: They didn't mention that the stocks have been registered for immediate sale. Phew, thats a lot for a nonperforming company. C.