Penny Stock Scams: Food Company becomes Luxury Goods Seller

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Penny Stock Scams: Food Company becomes Luxury Goods Seller
<a href="https://pixabay.com/users/3112014/">3112014</a> / Pixabay

Penny Stock Scams: Food Company becomes Luxury Goods Seller

You can guess that I am talking about promoted penny stocks.  From now on, whenever I write about this, I will update this table:

Ticker

Date of Article

Nomad Capital: Looking For Businesses That Want To Get Better Every Day

Charlie MungerThe Nomad Investment Partnership had one of the best track records in the hedge fund industry during the first decade-and-a-half of this century. Q3 2020 hedge fund letters, conferences and more Run by Nicholas Sleep and Qais Zakaria between 2001 and 2013, the partnership yielded a total return of 921.1% after performance fees for investors Read More


Price @ Article

Price @ 6/12/12

Decline

GTXO

5/27/2008

2.45

0.0395

-98.4%

BONZ

10/22/2009

0.35

0.018

-94.9%

BONU

10/22/2009

0.89

0.0799

-91.0%

UTOG

3/30/2011

1.55

0.07

-95.5%

OBJE

4/29/2011

2.90

0.04

-98.6%

LSTG

10/5/2011

1.12

0.1525

-86.4%

AERN

10/5/2011

0.0770

0.0014

-98.2%

IRYS

3/15/2012

0.261

0.16

-38.7%

NVMN

3/22/2012

1.47

1.3

-11.6%

STVF

3/28/2012

3.24

0.46

-85.8%

CRCL

5/1/2012

2.22

1.12

-49.5%

ORYN

5/30/2012

0.93

0.75

-19.4%

BRFH

5/30/2012

1.16

0.765

-34.1%

Personally, I find the consistent losses to be impressive.  All of the companies that I wrote about more than three months ago have losses greater than 86%.

Tonight’s loser is Luxeyard [LUXR].  I got this sorry excuse for research today. Six months ago the company, was called Top Gear, Inc., was based in Israel, and had the goal of becoming a leading kosher food certification organization.  As a result of an acquisition of Luxeyard, and spinout of the kosher food certification efforts, the company is a website for selling luxury goods.

Well, at least the disclaimer tells some truth this time:

NBT Equities Research and/or its publisher, ChangeWave, Inc., dba NBT Communications has received $35,000 and been pledged 75,000 shares of rule 144 common shares in LuxeYard to assist in the writing of this advertisement.

Next Media LLC paid $1,500,000 to marketing vendors to pay for all the costs of creating and distributing this report, including printing and postage, in an effort to build investor awareness.

Next Media LLC was paid by non-affiliate shareholders who fully intend to sell their shares into this advertising campaign.

Prior holders of Top Gear, and those who sold Luxeyard to them have paid the research liar to bull up the price so that they can sell into it.  Those who buy Luxeyard are dumb; really, really dumb.

Anytime a third party promotes a stock to you, and it is not a normal Wall Street “We provide research so that we can do IPOs and get trading volume,” avoid it.  All of these promotions are scams.  They don’t make money.  Average investors lose, even those that think they can play the speculation game.

Again, I ask why promotions like this are legal.  If the disclaimer is small type (this one was 7.5 points), and the regular type encouraging investment is 12+ points, I think the disclaimer should not be valid, and the author, publisher, and backers should be subject to lawsuits, that they forfeit their ill-gotten gains.

By David Merkel, CFA of Aleph Blog

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David J. Merkel, CFA, FSA — 2010-present, I am working on setting up my own equity asset management shop, tentatively called Aleph Investments. It is possible that I might do a joint venture with someone else if we can do more together than separately. From 2008-2010, I was the Chief Economist and Director of Research of Finacorp Securities. I did a many things for Finacorp, mainly research and analysis on a wide variety of fixed income and equity securities, and trading strategies. Until 2007, I was a senior investment analyst at Hovde Capital, responsible for analysis and valuation of investment opportunities for the FIP funds, particularly of companies in the insurance industry. I also managed the internal profit sharing and charitable endowment monies of the firm. From 2003-2007, I was a leading commentator at the investment website RealMoney.com. Back in 2003, after several years of correspondence, James Cramer invited me to write for the site, and I wrote for RealMoney on equity and bond portfolio management, macroeconomics, derivatives, quantitative strategies, insurance issues, corporate governance, etc. My specialty is looking at the interlinkages in the markets in order to understand individual markets better. I no longer contribute to RealMoney; I scaled it back because my work duties have gotten larger, and I began this blog to develop a distinct voice with a wider distribution. After three-plus year of operation, I believe I have achieved that. Prior to joining Hovde in 2003, I managed corporate bonds for Dwight Asset Management. In 1998, I joined the Mount Washington Investment Group as the Mortgage Bond and Asset Liability manager after working with Provident Mutual, AIG and Pacific Standard Life. My background as a life actuary has given me a different perspective on investing. How do you earn money without taking undue risk? How do you convey ideas about investing while showing a proper level of uncertainty on the likelihood of success? How do the various markets fit together, telling us us a broader story than any single piece? These are the themes that I will deal with in this blog. I hold bachelor’s and master’s degrees from Johns Hopkins University. In my spare time, I take care of our eight children with my wonderful wife Ruth.

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