Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : Zia Sun(zsun) -- Ignore unavailable to you. Want to Upgrade?

To: realmoney who wrote (1513)	5/5/1999 4:54:00 PM
From: jjs64	Respond to of 10354

Story going around that TMOT (of the ZSUN/CQMT/TMOT/LCAI/BVEX/DYNX group) is going to be on CNBC messages.yahoo.com. ragingbull.com More so than any of the other companies in Cragun's stable, TMOT has managed to surround itself with a thin veneer of respectability and credibility. Is it not appropriate to provide CNBC with some facts and information that TMOT probably will not volunteer? Will this not enable CNBC to more objectively report on the company? Let's try and understand TMOT a little bit better. With 17.1 million shares outstanding, currently trading at $4.00, TMOT has a market cap of $68.6 million. According to TMOT's most recent 10K, the company has more than 650 shareholders and a significant portion of the stock is held by non-US investors. Non-US investors? How did non-US investors become involved in a small Phoenix, Arizona based company? Enter Cragun and Crew? Enter PT Dolok Permai d/b/a International Asset Management? Enter Amber Securities (with its offices in Taiwan, Hong Kong, and Barcelona)? Just how did all these foreign investors get into TMOT. The answer is Reg S. TMOT proceeded to issue stock under Regulation S. The Regulation S stock was, according to sources, underwritten, or otherwise purchased by International Asset Management. With an abundant inventory of Regulation S stock, International Asset Management embarked on an aggressive sales effort and unloaded the stock on European, Asian and other foreign investors. So, you may ask, what's wrong with selling stock to foreigners, there are literally thousands of foreign investors in the US equities markets? During the period September 1996 to February 1998 Titan issued a total of 5,333,333 shares (split-adjusted) under Regulation S. According to Form 10SB filed with the SEC by TMOT on 9/30/98, the total cash received for these shares amounts to $7,000,000, an average price of $1.3125 per share. However, according to sources, IAM/PT Dolok did not charge investors $1.3125 but approximately $5.00 per share. Sources say that both invoices and circulars issued by International Asset Management, and Titan's Offering Memorandum substantiate this. Investors paid $5.00 per share which they believed would form part of Titan's equity, but only $1.3125 found its way to the company. 77% of the investors' money may disappeared....Per share $3.6875 ($5.00 - $1.3125) has vanished into whose hands?. Applying this figure to the total shares issued yields an astonishing amount of $19,666,665 ($3.6875 X 5,333,333) in undisclosed, unreported and illicit profits. Makes Glittergrove (CTRN) look like kids. Almost $20 million in illicit profits from sale transactions in a microcap company with a market cap of $68.6 million, that's 28% of the market value of the company! What is the position of the SEC on this matter? Here's what our friends in Washington have to say: "Under a rule known as Regulation S, companies do not have to register stock they sell outside the United States to foreign or "off-shore" investors. In the typical off-shore scam, an unscrupulous microcap company sells unregistered Reg S stock at a deep discount to fraudsters posing as foreign investors. These fraudsters then sell the stock to investors at inflated prices, pocketing huge profits which they share with the microcap company insiders." NASD Regulation lists various types of conduct which are prohibited. Specifically, with regard to markups NASD Regulation states that "charging a customer excessive markups, markdowns, or commissions on the purchase or sale of securities" is prohibited. Buyer Beware!