ZiaSun Technologies, Inc: Rebuttal to Stockdetective
You recently published an article on our company ZiaSun Technologies, Inc
under the section Stinky Stock entitled Sunburn. Your article paints an
extremely misleading, inaccurate and defamatory picture of ZiaSun and this
rebuttal serves to set the record straight on your one-sided story.
Your article states that your company became "nervous" when you found that
ZiaSun shares a telephone number with Veritas Group, and that individuals at
Veritas were unable to answer "basic" questions about ZiaSun's stock structure
and business plan. With regard to these statements, investigation on the part
of Ms.ÿDuke and your company would have revealed to you that ZiaSun leases
space in a shared office suite with Veritas, in large part for the convenience
of a North American location and time zone, so that investors and shareholders
can be kept abreast of the company's developments in Asia. There is nothing
sinister or unusual about this as many public companies have a shared or
common number with their investor relations representatives so they can
expeditiously field questions about the company. No CEO or CFO of a company
has the time to answer every single shareholder question, hence they hire IR
practitioners to assist them in this regard.
Your staff writer felt that several people at Veritas "were unable to answer
some pretty basic questions about the company's stock structure or its
business plan." We are unsure what your term "basic" refers to specifically.
Possibly you mean standard or traditional, however, giving you the benefit of
our doubt, Veritas the shareholder relations company has been instructed by
ZiaSun to wait for new stock structure information to be verified by corporate
counsel and accounting prior to stating stock structure post the recent
acquisition of Online Investors Advantage. With regards to the business plan,
ZiaSun has been very forthcoming with disclosure of information relating to
the company's business strategy as events have occurred, and it simply does
not make any rational sense to expect ZiaSun to disclose what would amount to
extremely confidential information in response to your reporter's casual
inquiry. Regarding ZiaSun's business plan, the company issues press releases
that are statements of the company's business strategy as consummated. We
question your purpose to inquire of a third party matters that they should not
know until at which time the company releases such info. This, we believe,
prevents any misstatements or insider information from being circulated.
Your article states that several people at Veritas were contacted with regards
to inquiries, and also claims that inquiries to Mr.ÿTobin, ZiaSun's CEO, were
not responded to. At the same time, your article does not indicate who was
contacted at Veritas, or specific times that Mr.ÿTobin was contacted. Your
investigator knew or should have known that Veritas monitors all incoming
calls, to protect itself against situations such as this. ZiaSun and Veritas
have no record of any such attempted contacts by Ms.ÿDuke or anyone else from
your company. Even if there were such a record, and even if such contacts in
fact took place, there is no indication whether Veritas personnel or Mr.ÿTobin
were given an adequate opportunity to respond. Instead, your article was
prepared and published with the intent of giving the impression that Veritas
and ZiaSun were somehow ducking questions or concealing information.
It is significant to note in this regard that there is similarly no record or
claim on the part of your reporter, Ms.ÿDuke, that she ever identified herself
as your reporter to Veritas personnel or to Mr.ÿTobin in any contacts that may
have taken place. In light of her failure to identify herself and assuming
that she did in fact attempt the contacts she claims, it is not difficult to
understand why neither Veritas nor Mr.ÿTobin would be inclined to give what
amounts to sensitive company information to anyone who cares to phone up.
You reflect that ZiaSun shares had increased volume, which you attribute to
hype by way of your statement " The heavy trading was preceded by a number of
press releases announcing mostly non-events". Your paragraph on ZiaSun's
volume is accurate, however, you are alone in your perception as to what an
eventful press release contains. Your article characterizes press releases of
ZiaSun as non-events with the apparently intentional impression to readers
that ZiaSun was somehow manufacturing media attention. Proper investigation by
your company would have revealed that the press releases in fact related to
significant events relating to the stock, such as stock splits, announced
earnings and a major acquisition (Online Investors Advantage). On its face,
the fact that a large number of investors engaged in transactions involving
ZiaSun indicates that information contained in the press releases constituted
much more than "non-events." Once again, the article conveys an improper
impression with the apparent intent of depicting ZiaSun in a negative light.
The article indicates that ZiaSun intentionally misrepresented its
relationship with America On-Line, quoting a press release from ZiaSun. As
the press release indicates on its face, however, no such representation was
made. The statement by ZiaSun was entirely factually accurate and reflects
that AOL did, in fact, develop and expand an e-mail response center in
ZiaSun's Philippine facility, and that the success of that facility, operated
by AOL, confirmed the value of ZiaSun's concept.
Your report claims that "Earlier this year, ZiaSun told investors it would
file its form 10SB with the U.S. Securities and Exchange Commission by the end
of March. In March, the company said the numbers would be out in 60 days. "
ZiaSun never issued any statement as to when it file its form 10SB. However,
the company did state :
ZiaSun is presently in the process of preparing a registration statement on
Form 10-SB pursuant to Section 12(g) of the Securities and Exchange Act of
1934 in order to register its Common Stock pursuant to Section 12(g). It is
anticipated, but not guaranteed, that the Form 10-SB will be filed within 60
days. Thereafter the SEC has a review period and a comment period under which
any required amendments to the Form 10-SB will be filed. At such time as there
are no further comments from the SEC, the Form 10-SB will be deemed effective.
This was posted on the company's website at www.ziasun.com under the section
marked "Financial."
The company will release its audited financials through the recognized
Standard and Poor's Corporation and has employed the accelerated method for
publication. With respect to the Form 10-SB, it is unfortunate that the recent
acquisition of OIA has delayed this application to the SEC by a few weeks,
however, the acquisition was strategic and timely in all other respects and
made corporate sense regardless of the short delay of the 10-SB. The
complete set of audited numbers will soon be available to the public, but in
the interim, the company wanted to provide selected highlights of these
financials in an attempt to inform our shareholders prior to the S & P
listing, which we feel is our responsibility.
You stated " In the meantime, ZiaSun has released financial information on
two of its recently acquired subsidiaries - Momentum Asia and Momentum
Internet. But the information is incomplete and unaudited, so it is of little
value to investors trying to get a handle on ZiaSun's true financial condition.
"
These statements contain glaring inaccuracies. The statements claim that the
information ZiaSun released is unaudited in an attempt to further paint ZiaSun
as a suspect company to the reader. Reasonable investigation on your part
would have revealed that the financial information was in fact audited, and
that this information was contained in the ZiaSun press releases which were
readily available to Ms.ÿDuke and your company prior to releasing the article.
Additionally, you couple this with the impression that ZiaSun has somehow
delayed filing its Form 10SB. Once again, investigation on your part would
have revealed that various legitimate business reasons, including the OIA
acquisition, caused the delays.
The article questions the propriety of certain information released by ZiaSun,
questioning whether or not the information was "appropriate." The article
then states with regard to other information that an auditor was not named,
and that nothing was provided to show that ZiaSun's figures were "grounded in
reality." This section of the article concludes by stating that Mr.ÿTobin has
the answers but "he has been silent." This passage of the article obviously
is intended to convey that ZiaSun is concealing information, which is simply
inaccurate, as referenced earlier above. Additionally, it is significant to
note that in your article, questions as to the propriety of the information
released are immediately attacked and characterized as suspect. Reasonable
information would have disclosed that the information released by ZiaSun had
in fact been audited. Your failure to disclose this in the article and your
persistent characterization of ZiaSun as non-responsive and concealing
information goes to creating an apparently intentional impression that
ZiaSun's disclosures were suspect and misleading.
Under the obviously inflammatory title of "Growing at the Speed of Hype," your
article states that two of ZiaSun's subsidiaries are not profitable. This is
a blatant, factual inaccuracy, and reasonable investigation would have
revealed this. In fact, ZiaSun has three subsidiaries and all are making
money.
This section further compares OIA to a Wade Cook seminar, something which is
clearly inaccurate and intended to frighten investors. Any reasonable
investigation would reveal that Wade Cook and OIA have nothing in common
functionally or in regards to their philosophies. Wade Cook teaches options
trading. OIA as the company has formally stated :"is the largest company in
its specific industry, and is the market leader in educating the US public
regarding the benefits, dangers, and required skills for effectively trading
stocks on the internet. Online teaches investors who wish to trade securities
by computer, how to access and use the tools available on the Internet for
optimum investing results." In fact the company is on public record stating:
''OIA didn't start the online investing trend, nor are we driving it,''
explains President of Online Investors Advantage, Mr. Scott Elder. ''People
are rushing online to trade stocks like millions of children on a hot summer
day jumping into the deep end of a swimming pool. If they can't swim, they're
going to lose their lives. Likewise, if someone doesn't know the formula and
strategies for trading stocks, they' re going to lose a lot of money in the
stock market. We're just standing on the edge of the online trading pool,
saying, hey, before you jump in, you really should consider taking our online
trading swimming lessons. We're getting them before they take the plunge into
the pool and also after they've taken the plunge and realize the cost for our
education is a lot less than what it's costing them to learn it through bad
trading experiences.''
Elder personally responded to the Sunburn article by saying : "One thing that
would make me suspect about this (Stock Detective-sic) article is their claim
that "a query to Online Investor Advantage for information went unanswered."
I answer every "query" that is legitimate. If they called and left a vague
"return my call" message, a request like that would go unanswered of course.
All requests that indicate they have questions about the company that they
would like answered get responded to."
"Another thing that concerns me is their statement, "Online Investor Advantage
appears to be a Wade Cook seminar copycat, offering people the formula for
wildly successful trading." This indicates that they nothing about us.
Because we offer stock trading workshops they automatically assume it's a
"Wade Cook copycat." We are nothing like Wade Cook (we're told this every
week by people who have attended a Wade Cook workshop and then attend ours.)
We teach people how to use a proprietary web site, as well as other web sites,
how to search for stocks, do a fundamental analysis on stocks, do a technical
analysis on stocks, and then manage an online portfolio -- thus our name
"Online Investors Advantage." NONE of this is taught at a Wade Cook workshop.
"
The next passage of your article is internally inconsistent with statements at
the article's beginning and further shows your intent to paint ZiaSun in the
most unpleasant light as possible. Your article references the fact that
ZiaSun is focused on Asia and then describes the difficulties that investors
may have in reaching company officials. This completely disregards ZiaSun's
recognition of this concern, recognition which was the driving force behind
ZiaSun's locating an office in North America in space shared with Veritas.
The article presents a situation of "damned if you do and damned if you don't,
" first condemning ZiaSun for having an office in in North America, and then
claiming it has not been sufficiently effective in establishing a North
American presence.
The same section goes on to state that the fact that ZiaSun is an Asian
company makes it impossible for investors to visit the site for physical
examination. This statement is frankly odd on its face as investors do not
typically visit the sites of the companies they invest in. Further
inconsistencies are revealed in the next sentence which states that, ". . .
there is no shortage of information on the company," a statement which is
intended to convey that ZiaSun is all hype and puff. Again, this is
inconsistent with earlier sections of the article which vigorously argue that
ZiaSun has not provided sufficient information. Once again, the tone of your
article creates a situation where ZiaSun simply can not win.
Your article describes Veritas as a "promoter" of ZiaSun, claiming that
Veritas is paid to "hype the company." A reasonable investigation would have
revealed to your reporter that Veritas is not a promoter and is, instead, a
highly professional investor relations group and full member of NIRI, the
National Investor Relation Institute. The statements in your article are
facially inaccurate and intended to further convey the impression that ZiaSun
is providing improper information and is not a solid company. Additionally,
the information disseminated by Veritas and IBC is done for the benefit of
ZiaSun shareholders. Typically, the information is disseminated to assist
investors and potential investors in learning more about ZiaSun, something
extremely contrary to your article's characterization of ZiaSun as willing to
conceal information. All this is for the benefit of investors and potential
investors and would normally be considered a strength of the company. In fact,
due to these relationships, ZiaSun's stock has twice as many market makers
and is clearly more liquid than it was several months ago with its share price
substantially higher as well. Perhaps you could explain how this has hurt the
shareholders. In fact- if anything- your article has done nothing but damage
to shareholders and investors. The share price since you chose to publish this
article supposedly in the best interests of investors has fallen from $24 to
$16. How did this benefit those shareholders who lost money as a result of
your one-sided, factually incorrect and misleading article?
Your article goes on to suggests that "Stockhouse's Inner Circle" is a branch
of Veritas, somehow coloring the coverage its web site provided to ZiaSun.
Any reasonable investigation would have shown that this is a blatant
inaccuracy and entirely unfounded as a statement. Stockhouse is not a division
of Veritas, nor is the Inner Circle. In fact ? this statement goes directly to
your credibility and to the quality of your research. Your intent is,
consistent with the rest of the article, to besmirch ZiaSun and continue to
create a picture of a grand scheme to puff and hype a suspect company.
Your article correctly states that ZiaSun's subsidiary Swiftrade operates
through Amber Secruities. Your article then departs from the facts and states
that Amber Securities is the "sister company" of Amber Capital Assets Ltd. in
Hong Kong. This statement is without basis and reasonable investigation would
have revealed to you prior to publishing the article that there is no business
relationship between Amber Capital Assets and ZiaSun or any of ZiaSun's
subsidiaries. This misstatement of fact is particularly damaging to ZiaSun's
reputation given that the article goes on to describe an incident of apparent
misconduct by Amber Capital Assets with regards to an investor's purchase of
ZiaSun shares. The article apparently intentionally creates the impression
that ZiaSun was somehow involved in or responsible for the misconduct. The
factual inaccuracies and misrepresentations combined with the apparently
deliberate depiction of ZiaSun as involved in shady trading shows an apparent
intent on your part to depict ZiaSun as unreliable and unsafe for investors.
Conclusion
For the reasons indicated above, and for other reasons and inaccuracies not
enumerated, your article paints an extremely misleading, inaccurate and
defamatory picture of ZiaSun. These inaccuracies and improper
characterizations reflect a lack of any reasonable investigation or
alternatively a disregard for the accuracy of the statements. Instead, it
appears that your company and Ms.ÿDuke set out to prepare an article for
publication that tore ZiaSun apart and besmirched its reputation, or at least
that she did not do her homework and rushed in with a one-sided picture of the
company. We suspect that much of her research was provided by a group of short
sellers who have spent the last five weeks posting lies, half-truths and
irrelevant facts on Silicon Investor in an attempt to force the share price
down. It is ironic that so much credence has been given to their statements
when in fact they are the perpetrators of a collaborative short strategy.
Since FinancialWeb.com has a policy of publishing opposing viewpoints or
matters of fact in order to provide editorial fairness, particularly where
issues concerning material fact is disputed from a credible source, we urge
you to stand by this policy and publish this rebuttal as soon as possible.
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