The reason I dumped my shares and ate a loss is that I stumbled across something very suspicious: Two companies have been blasting press releases about Pilgrim. Under the byline of "tradersworks.com" and "tradergains.com," fifteen press releases have been put in under two months, pumping the stock.
I suspected that these were two (of distressingly many) services that companies hire to keep their name in the media, in hopes of attracting attention - and I even suspected they were owned by the same company. Their Web sites showed the same address, and I looked up the address to find it was a UPS store in a strip mall, a few miles from Pilgrim's headquarters.
And it gets worse: I looked up the domain name registrations for those sites, and I discovered that they were registered to someone with the same last name as the CEO of the company. I searched on that name, and found a page on facebook for a young girl who's in high school in the same town as the company is located - possibly the CEO's niece or daughter.
And at that point, it was clear that something is very wrong.
At best, the CEO has set up bogus media firms under his daughter's name to pump the stock - which strikes me as something highly unethical. At worst, the CEO is using this company to embezzle funds from his own company (writing checks to his own daughter as payment for "services").
And to make matters worse, there has been a lot of after-hours movement on the stock, suggesting that someone (possibly the same CEO) is loading up on cheap shares to dump on the market when the value rises.
There may be some reasonable explanation for all of this - I don't know the law or the facts well enough to say for sure that there are any ethical or criminal violations, but even a layman can tell that the situation stinks to hell.
And so, I've dumped my holdings and taken my losses ... and dropped a tip to the SEC so that they can take a look at the situation.
No comments:
Post a Comment