Forum Archive Index - May 2001

["Mike Hudson" <mikehudson@clear.net.nz>]

Interesting article Ben. I find it amusing that NZ is described by many as a "wild west market" when there are so many shenanigans going on the so called more regulated jurisdictions.

A personal experience. My first venture into Wall St. was a small fabless semiconductor manufacturer 3V Semiconductor (Nasdaq VVVI) Fortunately it was not a total disaster as I bought at US$8 and sold most of my position at US$30, however, foolishly as it turned out I kept 100 share for an interest.

The sequence of events, over about six months, was something like this

• The CFO resigned
• A couple of months later the company reported a problem in the way it accounted for sales and took a one of charge against profits to cover the overstatement of sales and inventory write down
• Three months later the company reported that it’s auditors had resigned and that it could not file its quarterly accounts.
• It was promptly suspended from the Nasdaq
• A deafening silence for two months then an announcement that all the company’s assets have been sold for and undisclosed sum via a share swap to a third party (no shareholders approval required apparently) and that the company is going into Chapter 11 to facilitate the transaction. After creditors have been sold anything left over will be distributed to shareholders in the form of share in the acquiring company.

 

I am not holding my breath and by the way all the executives in VVVI have been offered positions in the purchasing company.

VVVI was finally delisted today

This sort of thing happens all the time in the small cap jungle in the US, I suppose it’s a case of caveat emptor.

I wouldn’t want to put anybody off dealing in foreign markets as there are so many more opportunities than in our little patch but be careful out there!

Cheers

Mike H