The mission of The Elliott Report is to provide CEOs of Small Cap companies with data that will enable them to make informed decisions when seeking out a new Investment Banking relationship, Investor Relations Company, or Stock Promoter to represent their firm.
Thursday, January 4, 2007
Comments On Stock Promoters
Please add any comments to this post regarding experiences with Stock Promoters, good or bad or questions about generating investor awareness for your company.
Are multiple promoter campaigns worth the money? There have been a number of IR campaigns recently using multiple stock promoters and huge budgets. The ROI on these campaigns seems questionable at best. According to my sources AXTG recently spent over $389,000 to hire All Penny Stocks, OTC Picks, The Capital Report, Small Cap Voice, The Subway, and Wall Street News Alert and while they have posted some impressive volume their share price is down from $2.39 to $1.92. So we now the cost to the company but what is the cost to shareholders? Furthermore where is the money coming from to fund such a campaign when according to the company's financial statement AXTG had net income last year of ($167,237)? Small Cap Stock Promoters only charge exorbitant fees because there are still companies willing to pay them. Companies and their shareholders would be better served in the long run by keeping IR budgets within a reasonable range and reinvesting their precious capital back into the business. In addition the quality of new shareholders lower cost, more traditional IR campaigns might improve as well.
First of all, congratulations on a great blog. In an industry full of unscrupulous promoters, you are doing a great job of promoting best practices in small-cap IR.
Second, the worst problem we have seen over the past 6 months has been the number of companies taken by promoters for free-trading stock - and then walking away.
Bottom line - free-trading stock is a big red warning flag.
Lastweek's 10 day trading suspensions of 35 pink sheet stocks were attributed to spam activity regarding the suspended securities. Although no details have been given as to the companies' complicity there is another aspect to these suspensions that needs to be highlighted. If you go to the SEC website (www.sec.gov)you will see the following comment in the report:
The 35 suspensions concern companies that are not subject to the reporting requirements of the Securities Exchange Act of 1934. Not listed on any exchange, or on the OTC Bulletin Board, the companies' securities have been quoted on the Pink Sheets quotation service on an unsolicited basis, meaning that the brokers posting quotations for the purchase and sale of the securities are not required to conduct due diligence regarding the issuers.
The Commission cautions broker-dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the companies. Further, broker-dealers should be alert to the fact that, pursuant to Rule 15c2-11 under the Exchange Act, at the termination of the trading suspensions, no quotation may be entered unless and until they have strictly complied with all of the provisions of the rule. If any broker-dealer enters any quotation that is in violation of the rule, the Commission will consider the need for prompt enforcement action.
Basically these companies failed to meet minimum disclosure requirements stipulated by Rule 15c211, which states that:
Rule 15C211 Under SEC Rule 15C211, a U.S. securities broker or dealer may not publish a quotation for any security unless certain information concerning the issuer is available and the broker or dealer has a reasonable basis for believing that the information is accurate. The information requirement is satisfied, in simple terms, if: A) a Securities Act registration statement (F-6, F-1) has been filed within the last 90 days, B) the issuer is complying with filing requirements and has in its records the issuer's most recent annual report, C) the issuer is complying with Rule 12g3-2(b), D) the broker or dealer has on record information relating to the issuer, its securities, its business, products and facilities. Management information, financial statements of the issuer and certain other data must also be on record. Form 15C211, also known as Form 211, refers to the specific filing form a broker/dealer must provide containing the information necessary to publish a quotation on the company
There is not enough room on this page to list the number of securites that are not only being actively quoted (Some securities that have recently completed reverse mergers may still be piggy back qualified if the former company filed a 15c211. Following reverse mergers companies are supposed to file updated information statements to stay in compliance with the rule but many do not.) but are also actively promoting their stock.
The bottom line is companies that have not met minimum disclosure requirements have no business promoting their stock in the first place.
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The Elliott Report is a resource for Small Cap companies to inform and educate today's busy CEOs about companies and individuals engaged in the business of Investment Banking, Investor Relations, and Stock Promotion Services. In an increasingly difficult regulatory environment it has never been more important for companies to raise capital and create awareness in a responsible manner. The Elliott Report seeks out those entities dedicated to funding small cap companies and creating effective awareness campaigns through multi-tiered, legal and compliant platforms. After screening those entities we then place them on our Recommended List. The Recommended List includes detailed profiles and lists of recent deals. In addition to The Recommended List our followers can subscribe to our Free Elliott Report Weekly Newsletter for more in depth coverage. Due to the multitude of companies offering these types of services the need for accurate information has never been greater. The goal of The Elliott Report is to enable public companies to find reputable firms able to meet their fund raising and awareness needs on time and on budget.
6 comments:
Are multiple promoter campaigns worth the money? There have been a number of IR campaigns recently using multiple stock promoters and huge budgets. The ROI on these campaigns seems questionable at best. According to my sources AXTG recently spent over $389,000 to hire All Penny Stocks, OTC Picks, The Capital Report, Small Cap Voice, The Subway, and Wall Street News Alert and while they have posted some impressive volume their share price is down from $2.39 to $1.92. So we now the cost to the company but what is the cost to shareholders? Furthermore where is the money coming from to fund such a campaign when according to the company's financial statement AXTG had net income last year of ($167,237)? Small Cap Stock Promoters only charge exorbitant fees because there are still companies willing to pay them. Companies and their shareholders would be better served in the long run by keeping IR budgets within a reasonable range and reinvesting their precious capital back into the business. In addition the quality of new shareholders lower cost, more traditional IR campaigns might improve as well.
First of all, congratulations on a great blog. In an industry full of unscrupulous promoters, you are doing a great job of promoting best practices in small-cap IR.
Second, the worst problem we have seen over the past 6 months has been the number of companies taken by promoters for free-trading stock - and then walking away.
Bottom line - free-trading stock is a big red warning flag.
Best,
George Tsiolis
AGORACOM
Lastweek's 10 day trading suspensions of 35 pink sheet stocks were attributed to spam activity regarding the suspended securities. Although no details have been given as to the companies' complicity there is another aspect to these suspensions that needs to be highlighted. If you go to the SEC website (www.sec.gov)you will see the following comment in the report:
The 35 suspensions concern companies that are not subject to the reporting requirements of the Securities Exchange Act of 1934. Not listed on any exchange, or on the OTC Bulletin Board, the companies' securities have been quoted on the Pink Sheets quotation service on an unsolicited basis, meaning that the brokers posting quotations for the purchase and sale of the securities are not required to conduct due diligence regarding the issuers.
The Commission cautions broker-dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the companies. Further, broker-dealers should be alert to the fact that, pursuant to Rule 15c2-11 under the Exchange Act, at the termination of the trading suspensions, no quotation may be entered unless and until they have strictly complied with all of the provisions of the rule. If any broker-dealer enters any quotation that is in violation of the rule, the Commission will consider the need for prompt enforcement action.
Basically these companies failed to meet minimum disclosure requirements stipulated by Rule 15c211, which states that:
Rule 15C211
Under SEC Rule 15C211, a U.S. securities broker or dealer may not publish a quotation for any security unless certain information concerning the issuer is available and the broker or dealer has a reasonable basis for believing that the information is accurate. The information requirement is satisfied, in simple terms, if:
A) a Securities Act registration statement (F-6, F-1) has been filed within the last 90 days,
B) the issuer is complying with filing requirements and has in its records the issuer's most recent annual report,
C) the issuer is complying with Rule 12g3-2(b),
D) the broker or dealer has on record information relating to the issuer, its securities, its business, products and facilities. Management information, financial statements of the issuer and certain other data must also be on record.
Form 15C211, also known as Form 211, refers to the specific filing form a broker/dealer must provide containing the information necessary to publish a quotation on the company
There is not enough room on this page to list the number of securites that are not only being actively quoted (Some securities that have recently completed reverse mergers may still be piggy back qualified if the former company filed a 15c211. Following reverse mergers companies are supposed to file updated information statements to stay in compliance with the rule but many do not.) but are also actively promoting their stock.
The bottom line is companies that have not met minimum disclosure requirements have no business promoting their stock in the first place.
Wonderful idea!!...All your comments in this post about stock promoters are very attractive and enjoyable to us...I really like this post very much.Thank you so much for this great post.....
ideas
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