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Hey, SEC & DOJ: Why haven’t you helped us little investors?

August 23, 2016

 

 

If the SEC and DOJ are as honest as President Obama says they are, they will investigate

(1) Tom Taulli who wrote the Box Inc. (BOX) et al. hit piece “5 Tech Stocks That Will Be Obsolete by 2020”  http://www.kiplinger.com/article/investing/T058-C000-S015-5-tech-stocks-that-will-be-obsolete-by-2020.html#comment-2855412647 ;

(2) whoever at FinanceYahoo helped Taulli repeatedly re-post his Box Inc. (BOX) hit piece; and

(3) whoever Taulli was helping to scare little investors out of buying BOX stock, so that Big Boy investors could buy the stock cheap & then run it up–knowing full well that there were several upcoming catalysts* that all-but guaranteed that the stock would go much higher  than BOX’s recent low of $9.86 on July 5, 2016 (i.e., BOX closed at $13.30 today,  August 23, 2016, which is its highest price since April).

At least one other financial writer who covers venture capitalists has shamelessly bashed Box Inc., too.  It is reasonable to speculate that a tech company and/or a venture capitalist has its sights on buying Box Inc. at a fire-sale price.

 * * *

Since I first bought a stock in 2007, I’ve witnessed dishonest financial writers, analysts and even Big Boy investors repeatedly scare little investors into selling or not buying many stocks that clearly had upcoming catalysts–and therefore should have been relatively safe, predictable trades or even long-term investments.

Every day, little investors are shaken out or scared into staying on the sidelines, because of dishonest financial folks. It’s long overdue for this dishonest behavior to stop.

If the SEC and DOJ are “Obama-honest,” then they’ll investigate a whole bunch of financial writers and analysts who’ve bashed stocks in order to help financial folks to short stocks or to buy stocks or companies on the cheap. “Financial folks” include venture capitalists, Big Boy traders and investors, brokers, trading desks, etc.

Here are a few stocks that experienced “peak bashing” by dishonest financial writers, analysts and/or Big Boy investors just as the stocks were bottoming and then reversing for a big run up:

 1. Only after Facebook (FB) had fallen from its IPO-opening high of $45 in May 2012 and was sliding towards $20 in 2013, did financial folks screams become dire warnings:   “Millennials don’t use Facebook! Facebook will be obsolete!  Facebook is being replaced by Twitter!  Facebook’s stock is going to $13 or zero!”

Facebook closed at $124.37 today, August 23, 2016.

2. When Apple (AAPL) was bottoming in January and February, 2009 ($67 low), financial folks screamed the loudest that it was going below $60 or maybe zero. Or maybe Apple was another 1990s Tech-Bubble Microsoft that would never recover its higher levels.

Nope.

In 2014 Apple’s share price was about $600/share after it a $5 dividend/share and a 5 for 1 stock split.

3. When Netflix (NFLX) separated the billings for its streaming and DVD-by-mail sectors in summer 2011, analysts created faked mass hysteria in order to crush the stock from over $250/share.

As NFLX fell below $100, towards its low of about $57, financial folks’ screaming became shriller in order to keep little investors from buying the stock: Netflix was a flop, a failure and its brilliant founder and CEO, Reid Hastings, was toast.

4. Back in 2008, SolarFun was crushed from about $19 to below $9 after Morgan Stanley  acted as the underwriter for SolarFun shares.**

The prospectus included a lucrative side agreement for a Morgan Stanley BFF to borrow millions of SolarFun shares in order to short the stock with impunity:  “up to 7,843,140 ADSs (or up to 9,019,611 ADSs if the underwriter in such offering exercises its overallotment option in full), all of which will be effectively lent to an affiliate of Morgan Stanley & Co. Incorporated. This affiliate will sell the ADSs and will use the resulting short position to enable investors in the note offerings to hedge their investment. Solarfun will not receive any proceeds from the ADS offering.” See SolarFun’s press release http://files.shareholder.com/downloads/SOLF/0x0x160826/0655d889-4aa5-461c-be95-256ce509a433/SOLF_News_2008_1_24_General_Releases.pdf.

SolarFun was relentlessly shorted from $19.10 to below $10.

About the time Morgan Stanley’s BFF needed to return the borrowed shares, a totally fictional article was posted on FinanceYahoo in the late afternoon of March 19, 2008, saying that China had shut down all of its solar companies because they were polluting rivers.

The following morning, the SolarFun-doom article had disappeared from FinanceYahoo, and the stock was already up a couple bucks pre-market as the Big Boys-in-the-know covered and/or went long, churning the stock for a few days and then creating a massive short squeeze that ran the stock in minutes from below $18 to about $28 as naïve shorts scrambled to cover.

That $28 price happened to be a price target of an analyst or two, so naïve investors thought it was safe to hold the stock–until SolarFun came crashing back to Earth the next day or so.

5. CRUS, CYBR, SWKS, TDOC, MBLY, LNKD, BABA, CRM, AMZN,  MON, EOG, FSLR, are just a few of the stocks that dishonest financial folks have scared investors into selling; not buying; or buying at exorbitant prices and then scaring them into selling.

The reverse is true for dog stocks. Analysts pump them long after everyone, except naive investors, knows that they’re dogs. I believe, some analysts pump dog stocks in order to help Big Boy investors take profits or unwind from positions.

What I find most absurd is that so many financial folks whine about the good old days and ask why the stock market is so thinly traded and why so many investors are in ETFs that’ll trap investors when that bubble bursts.

***

HERE ARE SOME OF THE LINKS TO Tom Taulli’s article that was posted at several sites: (I don’t have the links to when Taulli’s article was repeatedly re-posted on FinanceYahoo each and every time a positive article(s) was posted about Box, Inc.–but I’m sure the SEC and DOJ can find them.)

5 Tech Stocks That Will Be Obsolete by 2020 | InvestorPlace
investorplace.com/2016/07/5-tech-stocks-will-be-obsolete-2020

Jul 05, 2016 ·www.msn.com/…/5-tech-stocks-that-will-be-obsolete-by-2020/ar-BBuCLxa

http://www.nasdaq.com/article/5-tech-stocks-that-will-be-obsolete-by-2020…

5 Tech Stocks That Will Be Obsolete by 2020
https://finance.yahoo.com/m/af39da72-23d0-3648-ae27-ef62e8c68ad0/…

5 Tech Stocks That Will Be Obsolete by 2020 – martinlustgarten
https://martinlustgarten.wordpress.com/2016/07/22/5-tech-stocks…

5 Tech Stocks That Will Be Obsolete by 2020
http://www.techinvestornews.com/Tech-News/Latest-Headlines/5-tech-stocks…

5 Tech Stocks That Will Be Obsolete by 2020-Kiplinger
http://www.kiplinger.com/article/investing/T058-C000-S015-5-tech-stocks…
__________
*Catalysts for BOX include Box Inc.’s earnings report on Aug 31, investor conference Sept 8, Box Works & new cooperative agreements to be announced in early Sept, Box’s being recession-proof, Box’s Safe Zones being one of the few tech companies likely to benefit from Brexit; Box’s biggest earnings pre-announced for back-half of this year; and several new products that’ll add to Box’s bottom line.

Of course, Box could be obsolete by 2020–as could every other tech company and its products.

But Box’s near-term catalysts are obvious–which is why Taulli’s article had to be repeatedly reposted on FinanceYahoo and perhaps elsewhere in order for it to have its intended effect:  Scare investors into selling and/or not buying the stock.

** The January 24, 2008, prospectus now excludes Morgan Stanley’s affiliate who borrowed the 7-9 million shares, but my semi-photographic memory says that it was one of the big banks that got a bail out after the 2008 financial crash:  “An affiliate of [Morgan Stanley] the ADS purchaser has informed us that it intends to use the short position created by the repurchase provisions of the share issuance and repurchase agreement and the concurrent sale of the purchased ADSs to facilitate transactions by which investors in our convertible notes may hedge their respective investments through privately negotiated transactions.” see p. 118 in SEC.gov’s document https://www.sec.gov/Archives/edgar/data/1371541/000114554908000123/h01649b1e424b4.htm#119
and SEC.gov doc  https://www.sec.gov/Archives/edgar/data/1371541/000114554908000121/h01649fwfwp.htm
 _______________

UPDATE: Interestingly, MAD MONEY’S Jim Cramer blessed BOX when it was above $13–and yet dissed it even below $10.

Reversing his own advice during the August 23, 2016, Lighting Round, Cramer blessed BOX as a spec play–even though BOX had closed at its most-recent high of $13.30.

What’s odd about Cramer’s buy recommendation is that its catalysts are the same now as at Box’s recent low of $8.85–but the stock markets are toppy (i.e., near record highs), so the Big Boys will be taking profits or staying on the sidelines until the Fed meeting in Jackson Hole, WY, on August 25-26, 2016.

Cramer is a pro, so he knows that toppy stock markets combined with a Fed meeting during the end of Q2 earnings season–without inordinately good news–will roil the markets and tank even the best of stocks.

Disclosure:  At the time of this writing, I own none of the stocks mentioned in this blog post.  Sadly, I was one of the suckers who sold all BOX shares at $10.61 after Tom Taulli’s article kept being re-posted–even though I love Box Inc., believe its CEO and  management team, had done my homework, listened to all of the earnings calls, read the quarterly reports, looked at the financials, watched tech presentations, and knew Box Inc. had several catalysts that ensured its stock would go higher.

It pisses me off that, after all these years, creeps masquerading as benevolent financial writers and analysts can impact my financial life.

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