H/T to a reader for sending this coveted Holiday card from Kingsford Capital – the reader commented – Our markets need a lot more guys like them, uncovering and exposing the worst frauds.
Below is the full card from Kingsford Capital – also see Kingsford Capital’s Mike Wilkins Suspects Issues at Galectin Therapeutics, InterOil
The Kingsford Capital Pull (one) over Holiday Sweater
2015 was another year of the stock market’s cheap chicanery and high-level hijlnx. For this holiday season. we present the ultimate ugly sweater in which each image portrays equally ugly stock market behavior. The ugly Christmas sweater craze built slowly; originally conceived as an outsider‘s straight-faced parody. it now functions as mainstream outlandishness. When you stop to think about it, anything called “a sweater” should be revolting. and certainly should not be sent to friends. But instead. as the year comes to an end and the weather turns cold. we hope that wrapping up in these memories of financial outrage provides a snug glow as we wish you much sweaty warmth this holiday season.
Gift: from Garbage: These three words sum up Kingsford Capital’s business model. as well as the main image on our sweater. 2015 again showed that one man’s trash is our treasure.
Forcefield Energy (FNRG) achieved a $1ooM market cap and rang the Nasdaq bell. despite looking largely like a money laundering operation. Two days after a Seeking Alpha story exposed them. the Chairman was arrested by the Feds as he tried to hop a plane for Costa Rica. and shares were halted.
After a small May IPO and a quick pump to obtain a big enough market cap to be included in the Russell 2000 index. Code Rebel (CDRB) shares were crashing when it announced a special call between its CEO and its new board member. a former Apple (Apple!) employee. It did little good after it became clear the board member was Skypeing from the passenger seat of a parked car. McDonald’s arches visible out the rear window.
Root98 Technologies (RTNB) boasted career stock nobblers Joe Grano and Ike Blech as Chairman and Vice Chairman. The stock fell apart after an investigative piece examined its board- including former Presidential candidate Wesley Clark, dubbed “The Penny Stock General” this year by Bloomberg. What former SEC Chairman Harvey Pitt is doing on the board is another matter.
But not all trash gets thrown out. and private equity went green for the green. recycling aged and lackluster restaurant concepts like Papa Murphy’s Pizza (FRSH, founded in 1981). El Pollo Loco (LOCO. founded in 1980) and Del Taco (TACO. founded in 1964). All were marketed as new and exciting “underappreciated growth stories.” But this awful offal was refuse too good to refuse. and we took advantage as the results of private equity’s private functions were piped through to the public markets.
Mt. Shanghai: Chinese stocks took investors on a stomach churning sled ride this year. This mountain ridge traces out the Shanghai composite index. which rose 60% from March to June (capping a 150% one-year move) before falling 45% over the next two and a half months. On the way up as many as 5.5M new brokerage accounts were opened weekly, and margin debt accounted for 17% of the market. Given that China now had more stock traders (90M) than Communist party members (88M). when the traders’ party was over, the other party had to do something or risk systemic collapse. Before the harrowing slide was over. which Beijing blamed on “malicious and illegal short sellers.” the government ordered brokerages to buy up tens of billions in stock. cut interest rates twice, lowered reserve requirements and devalued the yuan. while detaining and questioning hundreds about spreading “rumors? Mid-way through the schuss only 3% of ‘Chinese-listed stocks traded freely. Alpine echoes were heard across markets worldwide.
See full PDF from Kingsford Capital’ below.