In a surprise collection of new data, uber-progressive companies such as Apple (scored: 2/100), eBay (2/100), and Amazon (0/100) have failed miserably (so far) at doing anything meaningful about their Global Warming impact. Seen first in this story, good ole’ PC would be proud - industry elephants like IBM (score: 77/100), Sony (51/100), Dell (41/100), and Microsoft (31/100) all mopped the floor with the cooler, younger Apple crowd.

Check out the full Climate Counts Scorecard Here

I find this site very interesting because it really does help me to make purchasing/usage decisions based on environmental values I hold dear. For instance, with Yahoo! scoring a respectable (36/100), more than doubling Google’s less impressive (17/100) score — why am I defaulting google as my home page? Perhaps it’s time to give Yahoo! a chance. In an insanely contentious search engine/web market, and a consumer that is becoming very educated on Global Warming, you have to figure that Yahoo! can monetize this as soon as they realize the real marketing value that being green can have. Granted, they’re not even close to the 50% mark, but compared to their hipper and wealthier brothers at Google, they are clearly performing admirably.

Apple is a total disappointment. We’ve all seen the commercials - we’ve all laughed at least once at PC saying something funny - but after years of Apple, rather successfully, molding its image as younger, more creative, and more idealistic, they look completely full of crap with a score just a single notch above that of Clorox - you know - the company that makes bleach? If Microsoft had the balls to really exploit this, they could decimate Apple in the advertising market. I can picture it now :: ‘PC’ is sitting under a tree with a laptop corded to some solar panels in the distance; meanwhile, the Apple guy is chilling listening to some tunes on his iPod powered by a lead-gasoline generator puffing out black smoke. Think about it. Apple is a status symbol for intellectual-wanna-bes, artists, musicians, etc. Imagine what they’d be a status symbol for if all of these people, who are typically liberal and would very deeply care about environmental issues, decided to challenge them on Global Warming?

“Hey PC - I have a magnetic power cord thingy so it won’t tangle. Everything was like — all thought out. Well, except the whole Global Warming thing. Oh well. Let’s just all go buy an iPhone!”

I’m telling you — these companies better shape up. The pressure to ‘go green’ is heavier than ever, and it’s about d***time.

Nice to see the guys at factcheck.org (who is truly an impartial ..er.. fact checking website) nailed Tom Tancredo on claiming scientific studies were ‘equally split’ on Global Warming. If you’re running for President in 2008, being a global warming skeptic is undoubtedly the wrong side of the issue. Just ask the departing congressman in 2006 who were on the wrong side of the Iraq issue. I will say there is clearly more awareness about global warming now, as the evidence countinues to mount and the necessity to do something about it grows daily. This strategy of ‘50/50′, or the ‘global warming debate’ has been used for years. Essentially, if you can create and ‘brand’ doubt effectively, it becomes as believable as the truth.

In a presentation I did to the South Jersey Chamber of Commerce in 2004, I noted an internal ExxonMobile Memo, “A Global Climate Science Communications Action Plan”, that stated “Victory will be achieved when uncertainties in climate science become part of conventional wisdom”. Further, the word ‘uncertainty’ appeared in 5 out of 7 paragraphs in their op-ed ‘Directions of Climate Research’ on their website when I did the presentation. Fortunately, Exxon is also now on the ‘wrong’ side of this issue as corporation after corporation concedes that humans are the problem here.

Seems that Tancredo hasn’t gotten that internal memo just yet.

Global Warming

During the debate Rep. Tom Tancredo of Colorado claimed that scientific studies were equally split on the existence of global warming and whether humans are responsible:
Tancredo: Okay. First of all, the whole issue of global warming, for every single scientist that tells you it’s happening and that it’s our fault — and they’ll stack up to here in this reports — I can stack up another group of reports that say just the opposite.

Actually, we find that an overwhelming majority of the scientific community agrees that global warming is taking place and that human activity is predominantly to blame.

Most recently the Intergovernmental Panel on Climate Change (IPCC), overseen jointly by the United Nations Environment Programme and the World Meteorological Organization, released a report representing the work of 600 authors from 40 countries and 113 government representatives, saying:

IPCC: The primary source of the increased atmospheric concentration of carbon dioxide since the pre-industrial period results from fossil fuel use, with land-use change providing another significant but smaller contribution.

Also, the National Research Council, chief adviser to the U.S. government on science and technology, issued its own report as far back as 2001 that reads:

NRC: Greenhouse gases are accumulating in Earth’s atmosphere as a result of human activities, causing surface air temperatures and subsurface ocean temperatures to rise. Temperatures are, in fact, rising. The changes observed over the last several decades are likely mostly due to human activities, but we cannot rule out that some significant part of these changes is also a reflection of natural variability.

It’s true that there are dissenters to this consensus view. Among them are the Cato Institute’s Patrick Michaels, chief editor of the World Climate Report Blog, and the American Association of Petroleum Geologists. But the split is by no means 50-50 as Tancredo claimed.

Nearing a month later from the epic payout of over $1.2M to promote its stock - how is MBKR doing? To put it succinctly, not so well. Investors who jumped in at the post-mass-email price of $1.78 are now down over $1/share if they held their stock. That is a 60% decline in less than a month.

The lesson here is a good one. When a company goes to such extraordinary lengths to promote its stock, it’s clearly a major warning signal. While some promotion is normal and relatively accepted to maintain interest in a security, very little justifies a million dollar plus payout to a single individual. You have to think of the psychology behind it. If you were running a company (or in this instance a ‘third-party’ shareholder of the company) that you truly thought was undervalued, would you fork out over $1.25M+ to get the word out? You wouldnt do this if you had $50,000 in stock — you’d need the stock to increase by a multiple of 20 just to break even. Make sense? The only real agenda to shell out that much cash would to be to make even more cash on the stock selling side of things when the price increased - and that means ATN had a whole lot of stock to sell.

Here are the daily trading volumes over the promotional run:

4/25 - 1.48M - Roughly $1.5M (pre-email @ $1.21)
4/26 - 3.01M - Roughly $5.4M (stock closes $1.80)
4/27 - 1.85M - Roughly $3.7M (stock closes $2.28)
4/30 - 1.44M - Roughly $3.0M (stock closes $2.10)
5/01 - 1.07M - Roughly $1.7M (stock closes $1.85)
5/02 - 0.78M - Roughly $1.3M (stock closes $1.87)
5/03 - 0.74M - Roughly $1.2M (stock closes $1.83)
5/04 - 0.65M - Roughly $0.9M (stock closes $1.33)
5/07 - 1.23M - Roughly $1.3M (stock closes $.88)
5/08 - 3.00M - Roughly $2.1M (stock closes $.51)

As you’ll see, the biggest dollar volumes trading were at the inflated prices. By my estimates, which are just that, over $21M of stock traded after ATN began the promotion with the Capital Report. So after putting up $1.25M+, they had liquidity of at least $15M from $1.83 or higher, some 83-100% better than the prices prior to the promotion. I would say they made out fairly well.

The company has since blamed shorting and even appeared on MN1.COM (who is quickly becoming a go-to source for stock promotion) to make the case that the company is artificially undervalued at the current post-promotion prices. I listened in for about 20 minutes and didn’t hear a single mention about the astronomical payouts that the Capital Report received, interesting considering that MN1 claims to be an impartial news agency.

Always keep in mind that insofar as promotions are concerned, they are almost always created to create liquidity for a selling party to get out of a substantial number of shares the market would not otherwise support - but keep in mind that not all promotions act the same. Seasoned promoters can gently move a stock a few pennies everyday for several weeks, allowing a real market to build at higher prices and minimizing their selling impact. Sometimes promotions are completed to set up financing deals at higher levels, which can actually benefit the company longer-term if management is faithful with their use of the funds.

In the case of MBKR, the larger the promotion was, the harder it fell. Stay vigilant with these plays, and wait for the slightest evidence that the buying pressure is subsiding. Timed correctly, they can be a quick vehicle to profit. Getting enamored, however, can cost you plenty.

When does $.02 equal $1,250,000? Ask the Capital Report investment newsletter. Reportedly, this is the sum they earned from their efforts to promote MortgageBrokers.Com, a OTCBB listed security that saw a server-crippling aggregate of $7.4M in trading today. Although the stock closing 48.8% higher would appear to have been an epic campaign, it doesnt tell the whole story.

For starters, the stock gapped up $.59 from yesterday’s close, which is a 47.01% climb. There is no official premarket trading on the OTCBB, so the market makers took the opportunity of the upcoming demand and forced new buyers to pay an opening price of $1.78 with absolutely no trading whatsoever. Great if you were lucky enough to have purchased the stock the day before (in the $1.10-20 area with about $2M in trading), but pretty rotten if you wanted to get in the stock this morning.

After an extremely heavy opening session that saw little movement in the stock, it finally pushed its way to nearly $2 by mid-afternoon. The party didnt last long, however, and struggled into the close to settle at $1.80, some $.02 higher than when it opened and was actually traded.

What this tells me .. $7M+ later and a meager 1.7% gain for those who got their orders in off the open, is that there was enormous selling intent every step of the way. For a reported float (from message boards), of approximately 9M shares, it’s sure curious that with nearly half of the believed float coming in with hard buying, it was nearly matched step-by-step with willing and able sellers.

Adding to the mix was an interesting $4.06 price target issued by Beacon Equity Research, who claimed to have received 40,000 restricted shares that were later registered (became free-trading in an SB-2, S8, or other method) and were currently available to be sold. The amount of stock was hardly a hiccup in the trading of the shares today, but the belief that MortgageBrokers.Com was worth north of $146,000,000 (with MBKR’s 10K for the period ending 2006 citing ~36M outstanding) was pretty amazing considering that even after tremendous revenue growth in 2006, the company was still only booking $4M in revenues, $1.5M in assets, and a 2006 net loss of over $2M.

Just to be fair, it wasn’t just the Capital Report that cashed in on the MBKR promotion. According to StockPromoters.Com, here is the complete list of everyone that had a piece of the pie:

The Capital Report - $1,250,000 (from ATN Enterprises)
OTC Picks - $7,500
Beacon Equity Research - 40,000 shares
Small Cap Voice - 10,000 restricted shares
The Bull Report - $100,000.
The Association for Investor Awareness - $2,500
Twin Trader - $5,000

Now, some of you might note that I’m typically liberal in my politics and discount this, but really, let’s consider for the moment what $1,465,000 might be equal to:

According to the Christian Children’s Fund, it costs just $.80/day to sponsor a kid to have the basic necessities of life. The money that poured into this promotion could have given kids over 1.8M days (4,900+ years) of these essentials.

According to data from the Natural Resource Defense Council, a compact flourescent lightbulb, over its lifetime, will prevent a half ton of Co2 from entering the air. With the cost of a single bulb about $2, about 732,500 bulbs could have been purchased and put to use in the USA - enough to prevent about 366,250 tons of global warming nastiness. Thanks to some Googling, it would appear that’s about the annual emissions from at least 80,000 typical cars.

Hey, who am I to say what some other entity should do with their money, but surely many will agree this compensation was extremely excessive. After all, if anyone purchased the stock after the email blast and message board pumps, they’re only up a couple of pennies for their effort.

It seems like you have the promoters winning, the company winning (it would be hard to convince me that with the dollar volume that we arent looking at some heavy selling from the inside), but the new investors treading water right now.

One thing is for clear, there are all sorts of eyes on this one. The money flow is both an amusing sidenote to a completely manipulated smallcap market, and a sad commentary on our priorities in this country.

A good friend of mine says the smallcap market needs this once and a while. As I’m writing this, BHUB is now trading at $.007, up some 928% over a few weeks ago. Needless to say, there are some pretty happy traders out there this morning. The cause? BHUB’s latest press release effectively citing that there are just a handful of what the company feels are lawful shares in their market. In a period of a half hour, the pinksheet-traded issue has moved over $800,000 through the stock, by far the most heavily traded smallcap stock I follow.

According to the company:

..announced today that the prior stock transfer agent, Select American Transfer Company, has informed the Company that there are currently 1,580,847,798 shares issued. The shares issued are 1,530,847,798 more than the legal authorized shares of the Company and 1,559,162,277 more shares than issued per the Company records.

Further:

The Company believes that the excess shares have been issued as unregistered shares, as defined by the Securities and Exchange Act, of a Delaware corporation unaffiliated with the Company. Select American Transfer has provided the Company with a list of all issuances of unregistered shares which commenced on or about September 8, 2005. The Company intends to engage legal counsel in Florida and Toronto to have these shares cancelled (sic) and to pursue the parties issued shares from September 8, 2005 through October 25, 2006. The Company will be pursuing damages in excess of $6,600,000.

Most of what I’m seeing on the message boards is people horray-ing that there is now ‘proof’ of over 1.5B shares short. Unfortunately, that’s not what the release says. Very clearly, the release speaks that there is indeed a ton of shares issued, but that according to conflicting records between the company and its former transfer agent, there shouldn’t be so many shares out there. Further, it looks like they’re going to try to take this to court. All signs point to this being a long and complicated process, not to mention what I feel is almost a certainty that the security will end up being suspended by the SEC for them to poke around.

The end result? For whatever reason, there are over 1.5B shares issued and outstanding right now. The problem is, the company cannot just cancel shares off the hip. You can cancel a certificate without much fanfare (that hasn’t been deposited/cleared back through the transfer agent), but with over 161,000,000 shares traded already this morning, it’s very clear that the disputed shares are already in the market. In all likelihood, they’ve been traded 10 times over by now. There isn’t a mechanism I know of that let’s you cancel free-trading stock in the market, which for better or worse, is what the disputed stock now is.

Interesting to me is that the company is only intending to seek damages of $6.6M, which is only about $.0044 per common share. Sure, the price of the security was .0004 not too long ago and it would seem a good figure, but looking at the larger picture it doesnt make sense to me. Let’s give BHUB the benefit of the doubt and agree that there is supposed to be something along the lines of 20M shares outstanding right now. From April 2006 on, the stock hasn’t been over a penny. Not once. Now, if the figures the company released were believed by them, there were several occasions when the company had under a $10,000 market cap. Surely, in almost a year of trading, corrective action would have been taken? Surely someone would have noticed the share price was ungodly cheap - even for a shell? It seems to me that the story only became interesting when the volume came into the stock recently.. or was is that the volume came into the stock recently to make the story interesting? At $.0044/share, would it not be conceding the company was only worth just under $90,000 (20M x .0044)?

It’s clear that the biggest catalysts right now in the smallcap market have nothing to do with the companies involved. In fact, in BHUB’s case, they’ve made it pretty clear that there is no company. With subpenny stocks, it seems that only a suspicion of a controversy is what makes these things tick. My personal belief is that BHUB is nothing more than an accounting error that is being publicly traded. When the dust settles, the shares, disputed or not, represent a public shell that currently is valued at least 10X more than what I’d expect a typical pinksheet sell to shell for in a private transaction. Broker/dealers can’t pull free-trading paper out of the public hands and I’m not certain that this dispute involves them anyway. It’s clearly a matter between the company, transfer agent(s), and now the throng of shareholders that the shell suddenly has a fiduciary responsibility to.

Someone screwed up, that’s not in doubt, but I dont think the information suggests that this is going to be more than a blip in the history books of the smallcap market. For now, my interest is to see how quickly the SEC responds to this matter. They are not known to be swift, but when they do eventually take action it’s usually a death sentence for these small little stocks.

I don’t have any position in BHUB (long or short), and have never had a position in the security.

Over the last few days, the talk of the smallcap world has been BHUB.PK, with good reason. The obscure pinksheet stock came from virtually nowhere to move from .0003 to .0023 in a period of (4) trading days - a 666.66% gain (don’t fret, biblical loyalists, the 30th decimal place of the gain is actually a 7, ending a long string of evil 6s!). From what I can gather looking around the insanely active Investor’s Hub board, there are principally two issues that the market seems to be very interested in. Neither of them is very flattering to the company.

The first seems to arise from a press release a thid-party company, Cyberhand Technologies, released way back in November. According to the release, Cyberhand would spin out its robotics division into another publicly traded company. No problems there. Where it gets, sticky, however, are posts like this one on Investor’s Hub that purport to be communications from the Cyberhand CEO (dated 3/11/07) more or less confirming they are at least up to something with BHUB. Further, the Cyberhand Robotics website allegedly began quoting BHUB.PK as its trading symbol, which only added to the fire and the perception that this transaction was a done deal. At some point later, Cyberhand posted the following notice on their stock information page, which still remains as of the time of this post.

Since negotiations with BHUB.com have not been concluded Cyberhand Robotics Corp. has terminated the quote link. If and when negotiations are concluded, and only then, will the link will be restored. Any question regarding BHUB.PK should be directed to the company itself.

Maybe I’m a traditionalist, but come on — doesn’t this seem exceptionally sloppy to anyone else? When Microsoft wants to acquire a tiny software company, you can bet that there’s not going to be a peep out of anyone until it’s a 100% done deal and properly disclosed. I’m not comparing a sub-penny pinksheet to Microsoft, of course, but it’s compelling to think about how drastically Cyberhand could actually damage their bargaining position with such a loose-lipped effort. Consider that with BHUB trading at anywhere between .0002 - .0004 when the negotiations were potentially taking place, they might have been able to acquire the whole thing for a small premium at most. It wasnt a stock that was trading actively. It likely didn’t have a lot of shareholders. Looking at the chart from January 1 to March 1, it appears there was perhaps $50,000 of total transactions over that period, hardly any sort of large liquidity. I can’t imagine BHUB had much leverage in the deal at that point.

Then came the buying frenzy which was not supported by any officially announced transaction, which today alone created over $1,000,000 in trades. Now the stock has a ton of shareholders, who have consistently kept it the most active board on Investor’s Hub for the last week. That is a major coup — there’s a lot of value in having a large shareholder base, especially when a month earlier no one had probably heard of the ticker. If the Cyberhand website is accurate in saying that any potential negotiations are not complete, then BHUB just gained a whole lot of unnecessary political capital. They have the shareholders, they have the interest, they have the money flowing through their stock.

The problem is, however, if the deal doesn’t work out — you’ve got a lot of charged-up shareholders who are going to want some answers. Like we typically see with heavily promoted securities, many believe the issue was illegally shorted and are hoping for significant returns. Whatever the reason for their investments, however, there is now a substantial liability in the fiduciary responsibility to those shareholders that didn’t need to exist in the first place. In the Investor’s Hub BHUB ‘IBOX’ section, the moderator writes the following:

What the MMs were not counting on was the I-Hub Team discovering that BHUB was the reverse merger partner for Cyberhand Robotics and that the CEO of Cyberhand Robotics has stated that there “should” be only 20 million shares in the BHUB shell float and that he “does not understand” how so many shares could be trading in BHUB since March 8 (when prior to March 8 the volume was “zero.”). What we have discovered since is that the MMs most likely naked shorted BHUB to the tune of 1.3 billion shares and we intend to put the pressure on them to cover. The short position in BHUB was subsequently confirmed on the monthly Regulation Sho list (Fail-to-Deliver) list.

Does it strike anyone that the ‘I-Hub Team’ should never have discovered that BHUB was the reverse merger partner, if that is in fact true? If so, the deal could fall through with very little collateral damage and without much scrutiny. By a lot of poorly-protected information, that is still not yet publicly confirmed or denied, these two companies have botched what should have been a fairly straightforward goal.

How will the saga end? Without a single comment from BHUB regarding its amazing appreciation in its stock price, your guess is as good as mine. However, with a painful 50% decline in Tuesday trading, clearly some investors took their profit. Further research from the Monthly Short Interest publication cited just over 29,000 open short positions as of March 15, 2007. The stock is indeed listed as a RegulationSHO Threshold Security, citing that there are fails to deliver (which are typically assumed to be short sales, but could also be long transactions) in excess of 10,000 shares. With a stock that traded over 857M shares today alone, there’s really no way to tell if the failures (since they arent disclosed, unfortunately) amount to any significant interest in the daily trading of the stock. BHUB has been listed on the SHO list since March 22, which means the stock began failures on March 15, 2007 when the stock traded just 60M shares.

I do not have a position in BHUB or Cyberhand (long or short), and do not intend to create any positions in the foreseeable future.