Blue Earth: Strong Sell On Law Enforcement Investigation, Fraud Allegations And Paid Stock Promotion by The Pump Stopper
In August, Mohnish Pabrai took part in Brown University's Value Investing Speaker Series, answering a series of questions from students. Q3 2021 hedge fund letters, conferences and more One of the topics he covered was the issue of finding cheap equities, a process the value investor has plenty of experience with. Cheap Stocks In the Read More
- Blue Earth Inc (NASDAQ:BBLU) CEO Johnny Thomas and John Francis have presided over financial disaster at many companies, including AgriBioTech, Inc. (OTCMKTS:ABTXQ) which resulted in fraud allegations and bankruptcy.
- A recent FOIA response from the SEC indicates evidence of a current law enforcement investigation related to Blue Earth.
- Blue Earth has hired multiple questionable stock promoters, including infamous John Liviakis, who was involved in countless stock market wipeouts and recently sold his BBLU stock.
- Multiple accounting red flags including Blue Earth’s previous auditor’s license revoked and barred, while current Blue Earth auditor has multiple PCAOB deficiencies including “failure to perform sufficient audit procedures”.
- Blue Earth CHP business already failing with due diligence turning up serious regulatory risks that could make it “not viable” while traffic battery business has apparently already failed before.
I believe Blue Earth Inc (NASDAQ:BBLU) is a reverse merger with paid stock rpomoters that has immediate -93.3% downside with longer term bankruptcy risk.
BBLU is a questionable reverse merger led by CEO Johnny Thomas and Vice President John Francis, a team involved with numerous failed rollups that have wiped investors out. Thomas and Francis are now applying their rollup strategy anew with Blue Earth. These executives were co-founders and executives at the famous AgriBioTech, Inc. (OTCMKTS:ABTXQ) shareholder wipeout that occurred during the late 1990s, which led to a plethora of lawsuits and fraud accusations after the SEC forced ABTX to restate its financials – the result was the loss of nearly a billion dollars of market capitalization and bankruptcy. More recently, these two presided over Consolidation Services (formerly CNSV), also a near total wipeout for shareholders. Curiously, neither CEO Johnny Thomas nor John Francis have any real renewable energy or power plant operation experience that I could find at all, leading me to question why they are even involved in Blue Earth Inc (NASDAQ:BBLU).
Furthermore, Blue Earth has hired many of the most questionable paid stock promoters on Wall Street to tout their stock. Among them, infamous stock promoter John Liviakis who was also involved in the ABTX wipeout and sold his entire stake before the SEC forced the company to revise its financial statements. Similar to ABTX, using the recent proxy I estimate Liviakis has been selling his BBLU stock. Meanwhile, Blue Earth Inc (NASDAQ:BBLU) is 60% owned by retail investors who have been drawn into the promotion but I don’t believe they know the real history of this company and the people involved.
Furthermore, a recent SEC FOIA response indicates evidence of a current law enforcement investigation . While the SEC has not released details of what this could be about, I do not view this as a positive. Meanwhile, Blue Earth Inc (NASDAQ:BBLU)’s previous auditor Lake & Associates had their license revoked and were barred. BBLU’s current auditor HJ & Associates has multiple PCAOB deficiencies spanning a gamut of issues outlined below.
Now after the failures of Xnergy and Castrovilla, research into the new traffic signal battery business turns up evidence it seems to have already failed once with ProGenix’s previous partner having moved on to lead acid batteries. Furthermore, Blue Earth Inc (NASDAQ:BBLU)’s much touted CHP business appears completely unviable while facing a shocking regulatory headwind that could make the entire thing “not viable” per BBLU partner JBS.
BBLU currently trades for a sky-high p/e of 268x using optimistic estimates and given that the value of all acquired businesses Blue Earth bought to build their company total just $63.5m, Blue Earth’s current $200m market cap is absurd in my view. Even using wildly optimistic estimates Blue Earth has -93.3% downside but based on all of the above, I believe Blue Earth is a terminal short on an inevitable path to $0.
I believe the evidence is irrefutable and has been linked, cited and sourced for you.
Agribiotech: Fraud Allegations, SEC Investigation, Accounting Issues, Lawsuits and Bankruptcy
The collapse of Johnny Thomas’s AgriBioTech, Inc. (OTCMKTS:ABTXQ) was so disastrous it is literally used as a published example of a stock market debacle by David Faber. The issues at ABTX ran the gamut from an SEC investigation, allegations of a “massive fraud“, alleged revenue “double counting”, financial restatements, “accounting manipulations”, CEO contradictions, margin calls for executives, lawsuits, and then bankruptcy as shareholders lost everything, ultimately wiping out more than $1,000,000,000 of equity value. A full summary of this debacle is beyond the scope of this report but it will certainly go down in history as one of the worst stock market disasters of all-time. When it was all said and done Bloomberg News reported February 22, 1999 AgriBioTech had hired armed guards to protect defendant Thomas at the AgriBioTech annual shareholders meeting.
Johnny R. Thomas: History of failed rollup strategies that wipeout shareholders
Johnny R. Thomas: CEO, Director, Pres and Co-Founder of Agribiotech
See full article here.