valueorama Posted March 12, 2015 Posted March 12, 2015 http://www.bloomberg.com/news/articles/2015-03-12/josh-sason-made-millions-from-penny-stock-financing Have fun reading. Somethings don't jive.
Picasso Posted March 12, 2015 Posted March 12, 2015 The guy deals in manipulating prices on penny stocks and came up with an idea to sell imported sand as holy. He read the intelligent investor so he must be legit. These types end up ruining their scheme by attracting media attention. Alex Hope a few years back as the genius currency trader, or that high school kid in the NY Post. They all share the same quality of living it up at the club and spending a lot to maintain a certain image.
rpadebet Posted March 12, 2015 Posted March 12, 2015 Seems like I have seen this movie before. (forgot the name) I think lawsuit->prison/bankruptcy->book deal->speaking circuit come next.
fareastwarriors Posted March 12, 2015 Posted March 12, 2015 Seems like I have seen this movie before. (forgot the name) I think lawsuit->prison/bankruptcy->book deal->speaking circuit come next. Seems like Mr. Circuit Speaker is doing just fine though... maybe our punishments are not harsh enough.
AzCactus Posted March 12, 2015 Posted March 12, 2015 I appreciate the post but have no interest in reading about someone getting rich this way.
berkshire101 Posted March 12, 2015 Posted March 12, 2015 I just read it. Wow. I wonder how much competition there will be now since this story is public.
intothebreach Posted March 12, 2015 Posted March 12, 2015 Thanks for sharing the story, it is an interesting read that however has nothing to do with value investing other than a passing mention of Graham's book. How is what he's doing anything other than usurious lending? This guy is not an investor, even less so a value investor. Shady financier or lender of extremely last resort seem more apt descriptions. I think rpadebet got it right for what's in store for him...
Parsad Posted March 12, 2015 Posted March 12, 2015 It's an unfortunate securities loophole he's exploiting. For example, in Canada the exchanges will not let you issue shares, even via convertible debt, below $0.05 a share. So, you cannot do this. It would be very easy for U.S. securities regulators to stop this practice. Cheers!
BargainValueHunter Posted March 13, 2015 Posted March 13, 2015 Recently overheard at the SEC... "You guys check out this Bloomberg article?"
Steve Posted March 13, 2015 Posted March 13, 2015 just like liar's poker inspired kids to go to wall street... wolf of wall street inspired kids to become shady penny stock investors.
ItsAValueTrap Posted March 13, 2015 Posted March 13, 2015 Seems like I have seen this movie before. (forgot the name) I think lawsuit->prison/bankruptcy->book deal->speaking circuit come next. Seems like Mr. Circuit Speaker is doing just fine though... maybe our punishments are not harsh enough. I think he got punished fairly. He probably still has money stashed away but at least he went to jail. Many of these guys actually don't get punished.
randomep Posted March 13, 2015 Posted March 13, 2015 Seems like I have seen this movie before. (forgot the name) I think lawsuit->prison/bankruptcy->book deal->speaking circuit come next. Seems like Mr. Circuit Speaker is doing just fine though... maybe our punishments are not harsh enough. I think he got punished fairly. He probably still has money stashed away but at least he went to jail. Many of these guys actually don't get punished. ... and he lost his wife.... who, at least in the movie was hot
Guest Schwab711 Posted March 15, 2015 Posted March 15, 2015 Kind of related but why is par-value allowed to be $0.0001?!
kfh227 Posted March 16, 2015 Posted March 16, 2015 So, is this just another story of a PoS on Wall Street that played by "the rules" and made a bunch of money but has no idea of the moral dilemma he is involved in?
siddharth18 Posted March 16, 2015 Posted March 16, 2015 It's a bit tricky to figure out what he's doing, and where the money that he ends up making, coming from. I actually got more curious about the person when he dropped Ben Graham's name...does it have anything to do with financing a quasi-company with convertibles? The only passing resemblance to what Graham/Buffett say and what he does is getting more in value than what he gives up, and he does do that. And that's based on what I know about Graham/Buffett, not what Sason says or what Bloomberg interprets it to be. As far as I can tell, he's offering loans to companies (which ought to be savvy counter-parties) and pretty much gets a guaranteed return as long as there's liquidity. His risk is not just repayment but also liquidity. And as far as I can tell, there is no such thing as an "unfair" deal if there's no coercion or deception. Maybe I read the article too fast...but can someone explain to me what part is "shady" or "manipulative" or causes a "moral dilemma" ? The companies do read the debt indentures right? And the shareholders who buy the shares do realize their company is not solvent right? Seems like Sason has found out a nice way to monetize the market's inefficiency (stupidity?) Or maybe I just read the article too fast...
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