Ms. Willis,
Your weekend broadcast regarding penny stocks was a travesty and the kind of report I would expect to see on CNN not Fox Business. As an extremely reputable well known micro-cap chairman and CEO, I take offense to your comments and that of Ed Butowsky, managing director at Chapwood Capital Investment Management.
Video Link:http://www.foxbusiness.com/on-air/willis-repo...5086558001
Here are some of the comments Ed Burtowsky and youself made on air.
1) No hot technologies ever found on Pink Sheets. ( Untrue )
2) Run away from all penny stocks. ( Opinion)
3) Penny stocks are not real companies. ( Liable comment and Untrue )
4) Management are criminals just selling stock. ( Opinion )
5) All penny stocks are bad news. ( Opinion )
6) Nobody should ever buy a penny stock. ( Opinion )
7) Penny stocks do not report financials. ( Untrue )
8) Penny stocks CEOs fail to update shareholders timely. ( Untrue )
9) The OTC has no standards for reporting. ( Liable Comment and Untrue )
10) Expect to lose all your money. ( Opinion )
11) Only buy big board stocks. (With their current obscene PE and valuations ??? ? PLEASE! - You make me laugh. You should be only SHORTING or buying puts (Leaps) on the majority of ?Big Board? stocks today. You are aware that without QE the Dow Jones is at 7,000 or lower, this is what you should be reporting in a fair and balanced way. This is why many people go and find undervalued companies on the OTC.)
While I do agree with Ed and yourself that many penny stocks are garbage, especially those trading in the sub-penny range. I would never say ?ALL? as that kind of generalization could create a potential negative situation for Fox Business and yourselves.
The OTC provides companies with executives who understand fiscal responsibility, capital markets, and who live by high moral standards a viable vehicle to bypass the incestuous venture capital segment which provide unrealistic valuations in companies daily. These valuations leading into traditional IPOs have spelled disaster for many ?HOT? tech stocks promoted to clients of Ed Butowsky?s firm and the majors. Do I need to list them?
The real story here is the unabated naked shorting of penny stocks by firms like Ed?s and your advertisers, such as Schwab, Options Express, TD Ameritrade, Etrade and of course Scottrade. I would not be surprised if Ed?s gang was shorting ( or putting eyes on ) the stocks targeted as being junk on your show. I have no interest in these stocks perpetrated on air as garbage nor have I done any research on them whatsoever.
The unabated naked shorting causes otherwise good intention companies with real products and services to fall into a death spiral funding situation caused by inexperienced management being lead by their counsel to toxic funding sources such as Magna Group, Hanover Holdings, Asher Enterprises and others who provide funding based on selling stock into the shareholder base. These firms typically work with majors ?tipping off? and front loading shorts into the market to maximize gains destroying shareholder value with the ultimate goal of bankrupting the company to avoid paying capital gains taxes which is big business for Wall Street firms.
I would think someone with your education and background would understand why ligament early stage companies would de-list from SEC reporting and use the alternative reporting system through the OTC Markets system which does have the same filing requirements as big board stocks.
See OTC Market reporting standards link: http://www.otcmarkets.com/learn/otcpink
Your on air comment that, ?You (Gerri Willis ) did research on OTC filing requirements and found there is none? is a bold face lie . I would not be surprised if the OTC Markets Group does not pursue litigation against Fox Business and yourself for that obvious untrue comment. Many smart top managers of OTC companies protect shareholder value from GREED and dilution by making Rule 144 unavailable by delisting from the SEC and using the OTC Markets filing requirements for ?current status? until they hit critical mass.
To be fair and balanced, you should have stated that any investment in an OTC stock should start with due diligence available on the OTCmarkets.com website. There you will find four reporting standards for Pink Sheet stocks. They are:
1) Caveat Emptor - ( Meaning you?re an idiot to buy that stock )
2) Stop - ( Meaning no information is available about the company ? which potentially indicates a bogus company )
3) Limited Information - ( Meaning there is little current information on the company and it has failed to keep up with the OTC filing standards ? Buyer beware)
4) Current Information ( Meaning the stock is fully reporting to OTC Markets standards which are very similar in scope to that of big board stocks)
Instead of using your afore mentioned comments in the opening of my letter that were brain farted on air by Ed and yourself I thought it prudent to offer you the rational (not opinion ) factors that make some penny stocks unattractive. They are:
1) Market maker manipulation
2) Large floats and share structures ( penny stocks with more than 100 million shares issued and outstanding should be potentially avoided)
3) Dilution
4) Inexperienced Management
5) Toxic Funding ( From sources such as but not limited to the Magna Group, Hanover Holdings, and Asher Enterprises ? I have personally met with SEC, FINRA, and FBI agents regarding these companies and their activities.)
6) Unscrupulous Transfer Agents (TA) who work with Toxic Funders allowing fraudulent legal opinions to circumvent SEC regulations. ( Best TA for penny stocks is Pacific Stock Transfer ? they protect the shareholders from this kind of illegal activity)
7) Lack of a cohesive business plan
8) No revenue
9) Filing status quoted at ?Caveat Emptor?, ?Stop? , or ?Limited Information?
I understand that you read a teleprompter/script and the stories are not written by you personally. The banter (Pundit) segments were there are no scripts, just opinions, flying around on air lead many into making very uneducated comments to try to enforce the opinion delivered on air. Perhaps unknowingly due to symptomatic or periodic on air retardation ( which plagues CNN ) occurs when the brain is trying to think of something to say that will be thought intelligent, thought provoking, and accurate but turns out to be inflammatory, potentially liable, and inaccurate.
Here?s a thought. Why don?t you spend more time providing the correct information? Maybe doing ?REAL? research to find the diamonds in the OTC rough instead of generalizing and damning a whole market system? The OTC provides educated investors ( generally not those watching NASCAR, yelling ?FREE BIRD? at concerts, or who care what the Kardashian?s are doing) a viable alternative that with research and proper due diligence can produce substantial upside that no big board stock could ever produce for an investor.
Call it Gerri?s OTC Spot Light. You?ll be doing a good service, as I think you are a good person who means well, but had a ?brain fart? on air.
FYI ? International Business Machines (IBM) owns 10% of my Pink Sheet ?Current Status? company, Yippy, Inc. We also have Fortune 100 clients as well being EBIDTA positive for three consecutive quarters with YOY revenue growth since inception in 2009. If the naked shorting would stop on legitimate OTC companies there would be more winners coming from the minors to the majors.
You want to talk about the wild wild west in the OTC, then look no further than the market makers and hedge funds, then to the management of current status Pink Sheet companies. My last OTC company ? Green Light Capital ( David Einhorn and Jeff Keswin ) bought me out and I was succeed by Ben Holcomb as Chairman CEO. Ben was the former President of Bell South International.
Holcomb succeeds Granville Article
http://www.thefreelibrary.com/Avana+Communica...a059581499
Green Light Investment Article
http://www.thefreelibrary.com/Avana+Receives+...a061625441
I expect to see an update and retraction of the incorrect information disseminated on your show. Certainly I will be speaking with the Managing Directors of the OTC Markets this week and demand action against Fox Business and yourself unless you do the right thing and retract untrue comments made by Ed Butowsky and yourself. BTW ? Ed Butowsky is no Jeff Keswin or Einhorn, not even close !!
Bottom line:
Stupid is as stupid does for ratings. Example ? CNN ? MD 370
http://www.foxbusiness.com/on-air/willis-repo...5086558001
With regards I remain,
Rich Granville
Chairman and CEO
Yippy, Inc.
rich@yippyinc.com
