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Faulking Opinions - Oct 18, 2005 - Printable Version
- A Pump, Dump and Short to Oblivion
by Anonymous by request
I have said all along (and to anyone that would listen) that someone should carefully investigate the events during and after the Internet bubble. Think about it --
* VC firms linked with big investment banks push questionable, Stanford/Harvard alum-lead companies into public financings
* Media makes said VC's/Investment banks/Stanford/Harvard alum-lead companies into front page celebrities
* IPO's pop like never before
* Stocks keeping running up until all institutions are out
* Gullible middle class flocks to online trading
* Bottom drops out of stocks in worst bloodletting on record
Result? The biggest transfer of capital from the middle class to the ultra-wealthy in recorded history. A Pump, dump and short to oblivion on an unprecedented scale.
Who's to blame? The VC's, the investment banks, the institutions and the media. Most of all the government for allowing it all to take place.
At whose expense? The middle class, of course, and many of the entrepreneurs that actually ran some of the later companies. These poor suckers 'believed' and lost everything when the IRS taxed them at the value of the paper gains on redeemed options that were never liquidated because of trading restrictions imposed by the SEC, the VC's or the investment banks.
I bet the very institutions that made all of the money on these deals had big short positions soon after they got out... Pump it all the way up with the media's help and then short it all the way down -- make a killing both ways.
And what did the media label this after it was all said and done -- "irrational exuberance"? Is it a coincidence that advertising revenue in this very media hit records while they were pumping up these stocks?
My bet is that this is when the fat cats saw how easy it was to manipulate the entire system for their own benefit and what you and Dave Patch are uncovering now will have its roots in many of the biggest "New Economy" flops of the late 90's.
Great job and thanks for not letting this issue die.
(If you use this please maintain my anonymity -- these boys could crush my company in the blink of an eye)
Editor's response:
You're right on the money on this one. I have never seen a set-up of this magnitude in my entire life, and unless we put a stop to it...or until they run out of suckers, whichever comes first, it will continue to drain our economy, our country's coffers, and our bank accounts. I posted this in our "Letters to the Editor" column, along with your name, address, phone number, and a picture of you at the beach. Hope you don't mind.
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