Editor’s note: This piece was written nearly a month ago by our shrewd anonymous colleague who is short the stock – we felt there was a personal attack too unwarranted, so we delayed publication while figuring out the best angle – meanwhile, last week Barron’s did a big piece which raised questions about Net Element Inc (NETE). Below is a short article that follows with some sections redacted but mostly intact and unchanged since well before Barron’s publication. Without further to do…
This week Barron’s online published an article that raised serious questions about Net Element Inc (NETE), a heavily shorted, highly controversial and unprofitable company. Earlier this month Jon Najarian, a CNBC contributor, publicly stated that he had purchased stock of NETE, which on March 8, 2018, had added Najarian to its Board of Directors. As of yet, it has not shown up in the SEC filings which would show that he actually bought the stock.
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On April 2, 2018, Najarian was a guest on a podcast hosted by Quoth the Raven (which can be heard at https://quoththeraven.podbean.com/). Najarian was asked why NETE pays $20,000 per month for promotions and with approximately 6:25 left in the podcast Najarian said, “I do own a bunch of shares now by virtue of both buying in the open market and by being on the Board and being given Directors’ shares.”
As a board director, Najarian is legally obligated to file a Form 4 if he purchases stock in the open market. The SEC says, “Form 4 must be filed within two business days following the transaction date.” To date (which is April 27) Najarian has not filed any Form 4s.
Also, the Company’s recently filed Form 10k also indicates on page 45 that as of March 30, 2018, Najarian owned no shares in the company.
Possibly it was just an oversight, and he forgot to make sure he or his staff filed the required papers.
Of good news for shareholders, when he was added to the Board of Directors, the stock jumped 70%. However, a jump that large is not atypical in illiquid securities like NETE, so the battle is just starting.