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studying/teaching/investing
Case Study: Scam, Fantasy or Fraud
—
Take your pick.
This case is a series of press releases and recent financial filings of
SNPK
. To
receive an
A+ plus anemail prize
—
point out what in the financial statement would cause any shareholder (God,forbid if you were a shareholder thinking this was a good long-term investment) to becomeill.
What strikes you as particularly toxic for the common shareholders? Also, list three or four Red Flagsthat you as a potential investor would notice. Tomorrow, I will post my analysis of these documents.You should be able to skim through the 100 pages
—
skipping over the superfluous
—
and find the key areasto look at. We are in the dark world of Penny stocks, pump and dump frauds, and mafia-controlledstock
—
far, far away from investing in franchise companies like IBM. But inverting and looking at theunderbelly of the stock market can teach us lessons. Yes, what to avoid, but also about human nature.I am asked to be placed on Penny stock email lists because occasionally I find wonderful shorts. Thisexample is not an example of what to short but how to find trouble in a financial statement.
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Form 8-KSUNPEAKS VENTURES, INC. - SNPKFiled: March 06, 2012 (period: March 01, 2012)Report of unscheduled material events or corporate changes.
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press releaseMarch 12, 2012, 4:05 p.m. EDT
1
Sunpeaks Ventures Comments on Current U.S. Prescription Drug ShortageCrisis
(pinksheets:SNPK) (the "Company" or "SunpeaksVentures") and its wholly owned subsidiary Healthcare Distribution Specialists, LLC ("HDS")are pleased to provide this commentary regarding the current prescription drug shortage crisistaking place across the United States.According to both the U.S. Food and Drug Administration ("FDA") and the General AccountingOffice ("GAO"), the United States is experiencing a record number of prescription drugshortages. The number of drug shortages has continued to grow substantially since 2006. Datacollected by the University of Utah Hospital's Drug Information Service indicates that 1,190prescription drug shortages were reported from January 1, 2001 through June 20, 2011. Of these,64% of shortages involved drugs that were in short supply more than one prior time. On average,drug shortages lasted an astounding 286 days (over 9 months). Over half of all shortagesreported from January 1, 2009, through June 20, 2011, were identified as critical, because, forexample, alternative drugs were not available or involved older generic sterile injectable drugs.Certain therapeutic classes such as anesthetics, oncology (cancer), and anti-infective drugs(antivirals, anthelmintics, and vaccines) were among those most often in short supply.The prescription drug shortage in the United States became mainstream news in late 2011, whenPresident Obama signed an Executive Order directing the FDA to take action to help furtherprevent and reduce prescription drug shortages, protect consumers, and prevent price gouging.The President's order directed the FDA to broaden reporting of potential shortages of certainprescription drugs and to further expedite regulatory reviews that can help prevent or respond toshortages. Under the President's order, FDA will also work with to the Department of Justice,which will examine whether potential shortages have led to illegal price gouging or stockpilingof life-saving medications.President Obama stated, "The shortage of prescription drugs drives up costs, leaves consumersvulnerable to price gouging, and threatens our health and safety. This is a problem we can't waitto fix. That's why today, I am directing my administration to take steps to protect consumersfrom drug shortages, and I'm committed to working with Congress and industry to keep tackling
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