I'll make it simpler for you to understand.
It's a pump and dump that got rumbled before the dump.
Scandal Ex-Melbourne player Joel MacDonald accused of misleading shareholders
- Thread starter Handsome.B.Wonderful
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It's a pump and dump that got rumbled before the dump.
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- #28
Hey, um, it’s my friend still. He’s asking what pump and dump means.
sonnywalters
Cancelled
Let's say Collingwood offer their fans cheap memberships in September and October for the following season. $50 membership and you get free entry to all home games plus finals.
They also tell you - in writing- they have Tom Lynch, Josh Kelly and Issaac Heeney all locked in for the next season. Contracts are signed. Locked and loaded!
The $50 memberships sell like hot-cakes. They sell thousands of them. People are going crazy for them.
Then when November comes around - they only actually recruit Lynden Dunn and Chris Mayne. No sign of Tom, Josh or Isaac.
January comes around and the club says oh by the way we made a mistake and those memberships are now only 6 game memberships.
Swap 'investors' for 'members' and you get an idea why some of them may be a tad disappointed.
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- Banned
- #30
But is that illegal or just sketchy as *
- Banned
- #31
That’s my mate asking clearly I know
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- #32
Sounds more like Antifa than a banker. This guy sounds like he was sacked for misconduct, can't get a financial services licence, and is driving forklifts 6 days a week while mumbling bitterly to himself.
Ohh he was a banker, I thought he identified as a w***er when I first read it. ‘Above your pay grade’...what a utensil!!
Marcus DuQuesne
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Who let the trolls out.
Marcus DuQuesne
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Obviously above your pay grade also you campaigner.
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- #36
It’s illegal.
No worries Gordon Gecko, thanks for taking the time away from your Bloomberg terminal to respond.
ShadeyP
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Either way , in AFL circles it results in a brown paper bag .
sonnywalters
Cancelled
Easy answer.
In the Collingwood example the $50 membership would come under Consumer law. So illegal.
In Joel's case - the people 'buying' the story are not consumers. They are investors. It comes under Corporations law. So probably not illegal.
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- #40
That seems pretty stupid, but believable, if that makes sense.
I guess the answer to ‘why is it different?’ is just ‘rich people’?
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I don't use the word "hero" often but you've earned it!
Give yourself a big pat on the back today banker man!
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Or they are lawyers
The legal bit is that when you have a publicly traded company you have to be very specific and open about things like big contracts or changes to business conditions (ASIC regulated).
From what I read or remember (not much), they allegedly were announcing big contracts before they were in concrete and several fell through and it's alleged that they didn't inform the market in a timely fashion. (If the Heeney deal falls through at the last minute you have to tell the market immediately).
It's not a pump and dump, where you only make announcements to boost the price before almost immediately selling before people realise you're lying.
It sounds more like being naïve when you move from private company to a listed company the rules change significantly.
Collingwood is a not for profit and owned by the members (isn't it?) so they're not held to as stringent regulations as a company listed on a stock exchange.
From what I read or remember (not much), they allegedly were announcing big contracts before they were in concrete and several fell through and it's alleged that they didn't inform the market in a timely fashion. (If the Heeney deal falls through at the last minute you have to tell the market immediately).
It's not a pump and dump, where you only make announcements to boost the price before almost immediately selling before people realise you're lying.
It sounds more like being naïve when you move from private company to a listed company the rules change significantly.
Collingwood is a not for profit and owned by the members (isn't it?) so they're not held to as stringent regulations as a company listed on a stock exchange.
hamG
Norm Smith Medallist
Finally they came off trading halt with a wishy washy re-explanation of their product performance. Company value was smashed by 54% in one day. It opened down ~70% and recovered a bit. I've never seen a single day collapse that big before.
Basically Joel and his buddy told the market they have landed major contracts (they said they had an agreement with Amazon for christ sake, little Aussie untested company getting an Amazon logistics contract? Rubbish, just rubbish) and gave potential earnings with each release. But they did not actually say that the customers were under no requirement to actually use their system. Plus they keep giving grey area answers about phase in and roll out periods and performance tuning that needs to happen before the actual earnings start buuuut unless the customers use their app for a trip specifically there will be 0 earnings, not 30,000 predicted trips per month and the crap they've been saying.
I don't buy naivety etc for one second. They deliberately held back critical information about the potential earnings and contract conditions and tricked the market, pumped up the share price, got a HUGE chunk of funding ($100m) from a company who should be embarrassed for not doing their homework.
Expect lawsuits from many extremely angry powered people.
Basically Joel and his buddy told the market they have landed major contracts (they said they had an agreement with Amazon for christ sake, little Aussie untested company getting an Amazon logistics contract? Rubbish, just rubbish) and gave potential earnings with each release. But they did not actually say that the customers were under no requirement to actually use their system. Plus they keep giving grey area answers about phase in and roll out periods and performance tuning that needs to happen before the actual earnings start buuuut unless the customers use their app for a trip specifically there will be 0 earnings, not 30,000 predicted trips per month and the crap they've been saying.
I don't buy naivety etc for one second. They deliberately held back critical information about the potential earnings and contract conditions and tricked the market, pumped up the share price, got a HUGE chunk of funding ($100m) from a company who should be embarrassed for not doing their homework.
Expect lawsuits from many extremely angry powered people.
- Thread starter
- #45
$300m class action against them, share price slashed to 58c early on today.
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So basically Joel's business is just like the team he played for. Lots of promise but in reality just total bullshit.
Given themselves a couple of hundred grand pay rise despite losing $5million with revenue under $500k, from memory in the AFR today.
Very poorly governed company by the looks. Need a new, independent board.
Very poorly governed company by the looks. Need a new, independent board.
hamG
Norm Smith Medallist
They are stuffed and they know it so why not cash in while they can. And yeah actual sales was around $270k, the rest in the revenue was interest on their capital raising. Their sales is now actually lower than Joel and the other guys combined salary (they also pay themselves in USD I think).
ASIC awoke from their slumber and is now looking into the company.
The company needs to sack their board but it is Joel, his buddy and one other guy who are the board. I don't think they are in a hurry to get themselves booted. The company could technically continue to exist for 15+ years losing $5m a year in its current state.
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Sell me this pen ...
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